Background Screeners Held Accountable for Inaccurate Work
We've been following a case in the 9th Court of Appeals that is noteworthy for our industry and those that conduct background checks. The case, Dennis v. BEH-1 and Experian Information Solutions involves an individual who requested a copy of his credit report. The results indicated that there was a judgment against him in a civil case. In fact, Mr. Dennis was ordered to pay his landlord $1,959. However, at the time of judgment he entered into a stipulation that allowed for a "no judgment" so long as he made payments on the debt that triggered the litigation. Mr. Dennis did in fact make proper restitution so he disputed the results with Experian stating that that because he made the payments, the case shouldn't be considered a judgment against him.
Experian sent a researcher into the court again to verify the results. The researcher came back and confirmed the original findings. Case ends here, right? Wrong!
Mr. Dennis filed suit against Experian for failing to correct the report and a court ruled in favor of Experian saying that Experian couldn't be held accountable for the public record. Mr. Dennis then filed an appeal and here's where things get interesting. Evidently, if the researcher would have looked at the case file, they would have seen the order about the stipulation. Taking this into account, the appellate court reversed field and ruled that Experian failed to "maintain reasonable procedures" to ensure the accuracy of its reports.
It wasn't the initial findings of Experian that led to this decision. It was their failure to look deeper once the consumer disputed the findings and disclosed the stipulation.
What does this mean? This means that Consumer Reporting Agencies better take seriously their obligation to ensure the accuracy of the public information it reports. This has always been a hallmark of our service and we have always maintained procedures to ensure the accuracy of the information we provide to our clients. That doesn't mean that information can't be flawed when it is first reported. However, that's why you have convictions reviewed for accuracy before you report them. But even that isn't a guarantee 100% of the time. And when an applicant disputes the findings, you better make sure to follow up properly and responsibly.
Experian sent a researcher into the court again to verify the results. The researcher came back and confirmed the original findings. Case ends here, right? Wrong!
Mr. Dennis filed suit against Experian for failing to correct the report and a court ruled in favor of Experian saying that Experian couldn't be held accountable for the public record. Mr. Dennis then filed an appeal and here's where things get interesting. Evidently, if the researcher would have looked at the case file, they would have seen the order about the stipulation. Taking this into account, the appellate court reversed field and ruled that Experian failed to "maintain reasonable procedures" to ensure the accuracy of its reports.
It wasn't the initial findings of Experian that led to this decision. It was their failure to look deeper once the consumer disputed the findings and disclosed the stipulation.
What does this mean? This means that Consumer Reporting Agencies better take seriously their obligation to ensure the accuracy of the public information it reports. This has always been a hallmark of our service and we have always maintained procedures to ensure the accuracy of the information we provide to our clients. That doesn't mean that information can't be flawed when it is first reported. However, that's why you have convictions reviewed for accuracy before you report them. But even that isn't a guarantee 100% of the time. And when an applicant disputes the findings, you better make sure to follow up properly and responsibly.
Labels: Compliance, Newsworthy Items
posted by Nick Fishman @ 12:31 PM
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