Georgia Woman Never Saw Copy of Background Report Prior to ‘Adverse Action’ from Flagstar Bancorp, Class Action Claims

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Flagstar Bancorp, Inc. failed to provide prospective employees with copies of their background reports before taking adverse action, a proposed class action claims.

Alleging violations of the Fair Credit Reporting Act (FCRA), the 12-page case out of Georgia says that without a copy of their background report, consumers are left in the dark as to what information is being reported about them and whether the data is accurate.

“Defendant’s failure leaves the person who is the subject of the report without any meaningful opportunity to review the complete information that is being reported about them and to correct any errors on the report,” the complaint states.

Under the FCRA, an employer who intends to take an adverse action, such as a rejection, against a job applicant “based in whole or in part” on the information contained in their consumer report must first provide the individual with a copy of the report, notice of the intended adverse action, and a notice of their dispute rights under the law, the complaint relays. The reason for providing “pre-adverse action notice,” the suit says, is to give the job applicant an opportunity to challenge the accuracy, completeness or relevancy of the reported information with the potential employer or credit reporting agency before losing out on a job or job prospect.

According to the case, Flagstar Bancorp has failed to provide pre-adverse action notice before taking adverse action against the subjects of consumer reports it obtains.

The plaintiff says she accepted a job offer from Flagstar for a work-from-home Loan Processor III position in Georgia in July 2020, upon which she authorized the defendant to perform a background check. Her start date, contingent on the results of the background check, was scheduled for August 3 or 10, the suit relays.

On August 6, however, Flagstar emailed the plaintiff with questions about her background yet did not provide the woman with a copy of her consumer report or notice of adverse action against her, the lawsuit claims. Though the plaintiff requested a copy of her background report on August 12, the defendant has failed to provide one and has yet to inform her of any intended adverse actions, the suit says.

From the complaint:

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