If a background check company reported something about you that was not true and you lost a job, an apartment, or a volunteer position because of it, you may be able to sue. Background check companies are consumer reporting agencies under the Fair Credit Reporting Act, and the FCRA gives consumers a private right of action against them.
Can you sue a background check company?
Yes, in many situations. The FCRA requires consumer reporting agencies to follow reasonable procedures to assure maximum possible accuracy, and to reinvestigate information you dispute. When an agency fails to do that and you are harmed, the statute allows you to bring a claim in federal or state court.
Common situations that lead to a background check lawsuit include:
- A criminal record belonging to someone else appearing on your report, often because the company matched on name and date of birth alone
- A charge reported as a conviction when it was dismissed, withdrawn, or resolved in your favor
- An expunged or sealed record that should no longer be reported
- A single case reported several times, so one charge looks like a pattern
- Employment or education history reported inaccurately
- A dispute you submitted that the company did not reasonably reinvestigate
What you may recover
The FCRA separates negligent violations from willful ones.
For a negligent violation, you may recover your actual damages together with the costs of the action and reasonable attorney’s fees.
For a willful violation, the statute allows actual damages or statutory damages of not less than $100 and not more than $1,000, whichever you elect, plus such punitive damages as the court may allow, and again the costs of the action and reasonable attorney’s fees.
Actual damages are not limited to lost wages. They can include the harm caused by losing the position, and courts have recognized emotional distress as a component of actual damages under the FCRA.
How long you have to file
The FCRA sets two outer limits, and the earlier one controls. An action must be brought no later than two years after you discover the violation, or five years after the violation occurred — whichever comes first. Waiting to see whether a dispute resolves can consume that window, which is why the date you first saw the report matters.
Dispute first, in writing
A dispute is usually the step that makes a later claim provable. When you dispute an item, the background check company must complete a reasonable reinvestigation within 30 days of receiving your notice. That period can extend to 45 days if you send additional relevant information during the first 30 days.
What helps a claim later:
- Dispute in writing, and keep a copy of what you sent and when
- Include the documents that prove the entry is wrong — a disposition sheet, an expungement order, an identity document
- Keep the pre-adverse action notice and the copy of the report the employer gave you
- Note the date you learned about the error
What the employer had to do
Before an employer takes adverse action based on a background report, the FTC states it must give you a copy of the report and a summary of your rights. After the decision, the employer must tell you the name, address, and phone number of the company that supplied the report, explain that the reporting company did not make the decision, and inform you of your right to dispute the accuracy of the report and to obtain a free copy within 60 days.
If you never received those notices, that is worth raising. It is a separate obligation from the accuracy of the report itself.
Individual claims and class actions
Some background check errors affect one person. Others come from a procedure the company applies to everyone — a matching rule, a way of treating dismissed charges, a failure to send the required notice — and those have been brought as class actions. Which route fits depends on whether the problem is your file or the company’s practice. That is a question worth asking early, because it changes how the case is built.
If the report that cost you the job came from a credit bureau rather than a screening company, the same statute applies and the analysis is similar — see suing Experian, Equifax, or TransUnion.
Talk to a lawyer about your report
The Kim Law Firm represents consumers in Fair Credit Reporting Act cases involving background check and screening company errors. If a report cost you a job or a place to live, send us the report and the notice you received and we will tell you whether we see a claim.
You pay nothing unless we win.
Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts.