If a background check error cost you a job, an apartment, or your reputation, you may have a legal claim under the Fair Credit Reporting Act (FCRA). Background check companies are consumer reporting agencies subject to the same federal accuracy requirements as the major credit bureaus, and when they report wrong criminal records, misattributed charges, or expunged convictions, they can be held liable for the harm they cause. Rausa Russo Law, PLLC represents consumers across New York and nationwide who have been injured by inaccurate background check reports, and in most cases, our clients pay nothing out of pocket because the FCRA requires defendants to pay the prevailing plaintiff's attorney's fees.
What This Law Covers
The Fair Credit Reporting Act, codified at 15 U.S.C. § 1681, is the primary federal statute governing the collection, dissemination, and use of consumer information. While most people associate the FCRA with credit reports from Equifax, Experian, and TransUnion, the statute's reach extends far beyond traditional credit reporting. Any company that assembles or evaluates consumer information for the purpose of furnishing consumer reports is a consumer reporting agency (CRA) under the FCRA, and that includes background check companies.
The most widely used background check companies in the United States -- including Sterling, First Advantage, Checkr, HireRight, Accurate Background, GoodHire, and dozens of others -- are all CRAs under the FCRA. They are legally obligated to follow reasonable procedures to ensure the maximum possible accuracy of the information they report. This obligation is codified at 15 U.S.C. § 1681e(b).
The FCRA's background check protections apply in several contexts:
- Employment screening: When an employer uses a third-party company to run a background check on a job applicant or current employee
- Tenant screening: When a landlord or property management company uses a screening service to evaluate a rental applicant
- Volunteer screening: When organizations run background checks on prospective volunteers
- Professional licensing: When licensing bodies use background check companies to evaluate applicants
Importantly, the FCRA imposes obligations on both the background check company and the entity that orders the report. Employers, for example, must obtain written consent from the applicant before ordering a background check under 15 U.S.C. § 1681b(b)(2), and they must follow a specific adverse action process if they intend to deny employment based on the results.
Common Violations
Background check errors are alarmingly common. A 2012 study by the National Consumer Law Center found that the FBI's criminal records database, which many background check companies rely on, is riddled with incomplete and inaccurate records. Common background check errors include:
- Wrong criminal records: Criminal records belonging to a different person with a similar name or date of birth are attributed to the wrong consumer. This is one of the most common background check errors and can be devastating for the affected individual.
- Misattributed charges: A consumer's report includes criminal charges or convictions that belong to a relative, a former roommate, or a complete stranger.
- Expunged records appearing on reports: Records that have been legally expunged, sealed, or pardoned continue to appear on background checks. Under many state laws and the FCRA, reporting expunged records is a violation.
- Outdated information: Under 15 U.S.C. § 1681c, background check companies generally cannot report arrests that did not result in convictions if they are more than seven years old. Despite this prohibition, outdated arrests frequently appear on reports.
- Mixed files: Information from two or more individuals is combined into a single report, creating a file that contains accurate and inaccurate information mixed together. Mixed files often result from similar names, similar Social Security numbers, or data entry errors.
- Failure to report dispositions: A background check shows an arrest but fails to include the disposition, such as a dismissal, acquittal, or nolle prosequi. Without the disposition, the report creates a misleading impression.
- Incorrect conviction details: The report lists the wrong charge level (for example, reporting a misdemeanor as a felony), the wrong offense, or the wrong date.
Employer Violations
In addition to errors by the background check company itself, employers frequently violate the FCRA's procedural requirements:
- Failure to obtain written consent: The employer ran a background check without first obtaining a standalone written authorization from the applicant, as required by 15 U.S.C. § 1681b(b)(2)(A).
- Failure to provide pre-adverse action notice: Before taking adverse action based on a background check, the employer must provide the applicant with a copy of the report and a summary of FCRA rights. This is the pre-adverse action notice required under 15 U.S.C. § 1681b(b)(3)(A).
- Failure to provide adverse action notice: After making a final adverse decision, the employer must send a separate adverse action notice that includes the name and contact information of the background check company, a statement that the company did not make the employment decision, and notice of the consumer's right to dispute the report. This is required under 15 U.S.C. § 1681m(a).
The FCRA requires a two-step adverse action process when an employer decides not to hire someone based on a background check. First, the employer must send a pre-adverse action notice that includes a copy of the report and a summary of FCRA rights. The applicant must be given a reasonable time (typically five business days) to review the report and dispute any errors. Only after that waiting period can the employer send the final adverse action notice and deny employment. Skipping either step is a violation of the FCRA.
Your Rights
The FCRA provides consumers with a comprehensive set of rights regarding background check reports:
- Right to consent: No employer may procure a background check on you without first providing a clear and conspicuous written disclosure, in a standalone document, that a background check may be obtained, and obtaining your written authorization.
- Right to accuracy: Background check companies must follow reasonable procedures to ensure the maximum possible accuracy of your report under 15 U.S.C. § 1681e(b).
- Right to a copy of your report: If an employer intends to take adverse action based on your background check, you have the right to receive a copy of the report before the decision is finalized.
- Right to dispute: You have the right to dispute any inaccurate information directly with the background check company. The company must investigate the dispute, typically within 30 days, and correct or delete inaccurate information under 15 U.S.C. § 1681i.
- Right to notice: If any person takes adverse action against you based in whole or in part on information in a background check, you must be notified and provided with the name and contact information of the reporting agency.
- Right to sue: If a background check company or employer violates your rights under the FCRA, you have a private right of action to sue for damages under 15 U.S.C. § 1681n (willful violations) or 15 U.S.C. § 1681o (negligent violations).
Tenant Screening: The Same Protections Apply
If a landlord or property management company uses a tenant screening service to evaluate your rental application, every FCRA protection described above applies with equal force. The tenant screening company is a CRA. The landlord is a user of consumer reports. If the screening report contains errors and the landlord denies your application without following the adverse action procedures, both the screening company and the landlord may be liable under the FCRA.
Damages Available
The FCRA provides meaningful remedies for consumers whose rights have been violated. The available damages depend on whether the violation was willful or negligent:
Willful Violations (15 U.S.C. § 1681n)
- Actual damages: Compensation for all harm you suffered, including lost wages from a denied job, higher housing costs from a denied apartment, emotional distress, and reputational harm
- Statutory damages: Between $100 and $1,000 per violation, even if you cannot prove specific monetary losses
- Punitive damages: Additional damages to punish the defendant's willful disregard of your rights, with no statutory cap
- Attorney's fees and costs: The defendant must pay your reasonable attorney's fees and litigation costs if you prevail
Negligent Violations (15 U.S.C. § 1681o)
- Actual damages: Compensation for all harm suffered
- Attorney's fees and costs: The defendant must pay your reasonable attorney's fees and litigation costs
Because the FCRA includes a fee-shifting provision, most FCRA cases can be pursued at no out-of-pocket cost to the consumer. If you prevail, the defendant pays your attorney's fees. This is why our firm handles background check error cases on a basis where you pay nothing unless we recover compensation on your behalf.
How We Can Help
Rausa Russo Law, PLLC represents consumers who have been harmed by inaccurate background check reports. Our attorneys handle every phase of a background check error claim, from initial investigation through trial if necessary.
When you contact our firm, we will:
- Review your background check report to identify every error and determine which entities are responsible
- Obtain the underlying records from courts, law enforcement agencies, and other sources to document the inaccuracies
- Identify all liable parties, including the background check company, the employer or landlord who used the report, and any data brokers involved in the chain
- File disputes on your behalf with the background check company if they have not already been submitted, or evaluate the adequacy of investigations already conducted
- Pursue litigation under the FCRA against every entity that violated your rights, seeking actual damages, statutory damages, punitive damages, and attorney's fees
- Negotiate settlements that fully compensate you for lost employment, housing, emotional distress, and other harms
We handle FCRA background check cases throughout New York and nationwide. Most of our clients pay nothing out of pocket because the FCRA's fee-shifting provision requires the defendant to pay attorney's fees when we prevail.