General Information Services, Inc. (GIS) has been hit with a class action complaint alleging violations of the Fair Credit Reporting Act (FCRA).  The complaint was filed in the U.S. District Court for the Western District of Kentucky (4:14-CV-51-M).  It is filed on behalf of “thousands of employment applicants” nationwide based on the allegation that GIS “adopted and maintained a policy of misidentifying sureties, consumers who post bond for someone who has been arrested, as criminal defendants in a criminal case, therefore misidentifying an innocent consumer as having a criminal record.”  Furthermore, the complaint alleges that GIS failed to notify consumers contemporaneously of this fact and that such information was being sent to employers without consumers knowledge.

In the instant complaint, Plaintiff Betty Lacy posted bail for a family member.  Said family member made his court appearance and the balance of the bond posted by the Ms. Lacy was returned, minus fees.  Ms. Lacy was listed in the Hopkins County, Kentucky public records database as a surety. The defendant for whom she posted bond was found guilty of multiple felony and misdemeanors counts of theft, and sentenced to five years probation. Thereafter, Ms. Lacy applied for employment at Dollar General and long and short of it — all 21 counts appeared on her consumer report as prepared by GIS and provided to Dollar General.  Her job offer was rescinded.

Causes of Action:

  • GIS violated the FCRA by failing to provide contemporaneous notice to the consumer pursuant to section 613 of the FCRA and failed to maintain strict procedures to insure that adverse information being reported is complete and up to date.  Plaintiff alleges that because in a prior lawsuit GIS claimed they do not provide contemporaneous notice of adverse information pursuant to section 613, they cannot now claim they do.
  • GIS failed to abide by section 607(b) of the FCRA by failing to follow reasonable procedures to assure maximum possible accuracy of the reports it sells to third parties.

Plaintiff seeks statutory damages of not less than $100 and not more than $1,000 per violation per Class member as they allege the violations are willful.  They are also seeking punative damages and attorney’s fees.

General takeaway related to FCRA litigation – if you are a consumer reporting agency (CRA) take time to review your insurance policies to ensure you have appropriate coverage either through your Errors & Omissions policy or your cyber insurance policy to cover FCRA litigation.  We  handle such litigation at my firm and it is on the rise, with class action complaints filed alleging violations such as: (i) failure to provide full file disclosures when requested by consumers; (ii) consumer consent lacking; (iii) disclosure and authorization notices which are not stand-alone or which are not “clear and conspicuous” disclosures; and (iv) adverse action steps not followed.  Not all of these responsibilities fall on the CRA, but expect cross claims from customers if your service agreements don’t clearly articulate who is responsible for what under the FCRA or you handle such responsibilities for customers and don’t fulfill the obligation.