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Recent Appellate Court Decision Against Consumer Reporting Agency

A recent decision by the 6th Circuit Court of Appeals found that misleading information in a background check, although technically accurate, was actionable under the Fair Credit Reporting Act (“FCRA”).

In Twumasi-Ankrah v. Checkr, Inc., ride-sharing service Uber requested that Checkr, Inc. (“Checkr”), a consumer reporting agency, perform a background check on Christopher Twumasi-Ankrah, a driver for Uber. As part of the background check, Checkr obtained Twumasi-Ankrah’s driving history from the Ohio Bureau of Motor Vehicles (“OBMV”). The OBMV reported that Twumasi-Ankrah had been involved in three motor vehicle accidents. Checkr passed this information along to Uber without conducting any further investigation. Uber then terminated Twumasi-Ankrah based on the results of the report from Checkr.

After he was terminated, the plaintiff provided Checkr with information that established he was not at fault in two of the accidents. The information provided included legal documents adjudicating him “not guilty” for minor traffic violations and a police report that portrayed him as the victim of a hit-and-run accident. However, Checkr refused to supplement or amend its report to Uber.

Twumasi-Ankrah filed a lawsuit against Checkr pursuant to the FCRA alleging that Checkr’s report was so misleading that it was inaccurate. Checkr moved to dismiss the complaint arguing that the information in its report met the technical-accuracy standard. Under the technical-accuracy standard, to establish a cause of action under the FCRA, a consumer had to allege that the consumer reporting agencies reported “factually inaccurate” information about the consumer. “Factually accurate” has been held to mean “literally ‘factually inaccurate’ information; information that is merely ‘misleading or incomplete in some sense’ does not count.” Checkr argued that the information included in its report that Twumasi-Ankrah was involved in three motor vehicle accidents was technically factually accurate. The district court granted Checkr’s motion to dismiss.

On appeal, the 6th Circuit resolved a circuit split on the issue. The 6th Circuit rejected the technical-accuracy standard used by the district court and held that a consumer could maintain an action under the FCRA by alleging that the consumer reporting agency “reported either ‘patently incorrect’ information about the consumer or information that was ‘misleading in such a way and to such an extent that it [could have been] expected to have an adverse effect [on the consumer].’”

This ruling brings the 6th Circuit in line with many other jurisdictions in the country, holding that misleading information, although technically accurate, can be actionable under the FCRA. It also encourages employers and consumer reporting agencies to ensure the accuracy of data before making hiring and firing decisions. By failing to perform or obtain a full and complete investigation, companies may find themselves embroiled in costly litigation.

If you have any concerns about your obligations under the FCRA or compliance with the FCRA, please do not hesitate to reach out to one of our many experienced attorneys.

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