Frontwave Credit Union Disclosures for Consumer Report FCRA Class Action

Frontwave Credit Union sometimes obtains consumer reports on current and prospective employees, says the complaint for this class action. That’s permitted by law. But the complaint alleges that Frontwave does not provide proper disclosures to the report subject before doing so, or obtain proper authorization, in violation of the federal Fair Credit Reporting Act (FCRA) and California laws, including the Investigative Consumer Reporting Agencies Act (ICRAA), Conusmer Credit Reporting Agencies Act (CCRA), and Unfair Competition Law.

While employers are permitted to obtain credit reports on employees or prospective employees, they must follow certain rules or procedures in doing so. One requirement is that they provide proper disclosures to the subject of the report and obtain the subject’s authorization.

Under the FCRA, the employer may not procure the report unless “a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes[.]”

Another requirement is that “the consumer has authorized in writing (which authorization may be made on the document referred to” above the procurement of the report by the employer.

The complaint alleges, “The reason for requiring that the disclosure be in a stand-alone document, according to the Federal Trade Commission (‘FTC’), is to prevent consumers from being distracted by other information that is side-by-side within the disclosure.” It adds, “The FCRA seeks to protect important privacy rights and to ensure that consumers receive adequate disclosure and provide adequate authorization for background checks. A stand-alone disclosure form is essential to achieving that goal.”

However, the complaint claims, Frontwave does not provide a stand-alone document: Its “preauthorization is embedded in a multi-page document that contains a host of other unrelated authorizations, disclosures, and disclaimers…”

A class and three subclasses have been defined for this action.

The FCRA Class is all natural persons living in the US, including its territories and other political subdivisions, who were the subject of a consumer report that was procured by Frontwave, between October 2, 2015 and the date of final judgment in this case.

The ICRAA Subclass is all members of the FCRA Class who live in California.

The CCRAA Subclass is all persons living in California, who applied for an employment position with Frontwave and executed an authorization form related to a consumer report, between October 2, 2013 and the date of trial of this case.

The UCL Subclass is all members of the FCRA Class who live in California and applied for an employment position with Frontwave, between October 2, 2016 and October 2, 2020.

Article Type: Lawsuit
Topic: Privacy
Tags: Background Reports, FCRA, Obtaining Reports Without Making Proper Disclosures