Interactive Data Illegally Sells Consumer Reports, Class Action Alleges

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Interactive Data, LLC faces a proposed class action that alleges the company unlawfully furnishes consumer reports for employee background checks without satisfying the strict requirements of the federal Fair Credit Reporting Act (FCRA).

More specifically, the 24-page case claims Interactive Data uses automated processes to gather public records information about consumers from sources that include criminal and traffic records, Social Security number records and sex offender registries and then sells the information to clients. The lawsuit alleges, however, that Interactive Data does not maintain reasonable procedures to ensure the maximum possible accuracy of the reports.

The complaint says that the defendant’s issuance of a consumer report about the plaintiff, who had been offered a job by Stellar Partners contingent on a background check, ultimately caused the woman to lose the job given the report, which was sold to Osa Consulting, the entity hired by Stellar to prepare the background check, contained inaccurate information.

The lawsuit contends that although Interactive Data lists on its website certain disclosures in which it claims the information it sells does not constitute “consumer reports” as defined by the FCRA, the company is aware that its reports will be used by clients to make employment decisions, meaning the defendant has consented to the FCRA’s governance.

“…Defendant knows or has reason to know that the information it sells to customers like Osa will end up in consumer reports that are used for FCRA purposes and are therefore governed by the Act,” the complaint alleges. “Yet, Defendant maintains the charade that the FCRA does not apply to it.”

The lawsuit alleges that despite Interactive Data’s attempts to avoid its FCRA obligations, the company is, in fact, a consumer reporting agency who provides information and services that are governed by the law. Per the case, the defendant’s idiCORE reports, for example, include “credit header, public record, publicly-available and proprietary data” to “provide[] intelligent insight into people, businesses, assets, and interrelationships.”

According to the suit, the defendant has violated the FCRA by:

• Failing to employ reasonable procedures to maintain the maximum possible accuracy of the information it reports about consumers;
• Failing to provide to consumers upon request file disclosures that include all of the information reported about the consumer, the sources of the information and the entities to whom the information was provided;
• Failing to provide notice to consumers of the information being reported about them and to whom it was being reported when the information is likely to have an adverse effect on the individual’s employment; and
• Reporting obsolete information about consumers.

According to the complaint, the plaintiff applied in August 2019 for a position with Stellar Partners, one of the largest airport retailers in the U.S., and consented to a background check to be performed by Osa Consulting. The lawsuit alleges that because Interactive Data furnished information about the plaintiff to Osa, who then repackaged the information and provided it to Stellar, it was also subject to the FCRA’s requirements regarding the transparency and accuracy of consumer information.

Per the filing, the report issued to Osa by the defendant contained multiple inaccurate records, including charges of theft, felonies, larceny, misdemeanors and other crimes the plaintiff “simply did not commit.” For example, the report included a second-degree felony charge with a mugshot that shows “another person entirely,” the suit says.

“Simply put, these criminal charges belonged to someone else and they were costing Plaintiff her job with Stellar,” the complaint reads.

The suit goes on to state that the plaintiff was unaware of the defendant’s role in her situation until after she filed a lawsuit against Stellar and Osa and it was revealed that Interactive Data sold the information to the latter. After this revelation, the plaintiff requested her complete file from the defendant but was refused, with Interactive Data claiming once again that it was not a consumer reporting agency and that the information it provided to Osa was not a consumer report, according to the complaint.

The case alleges that the defendant’s FCRA violations have been “willful, wanton, and reckless in that it knew, or should have known, that it was failing to comply with” the law’s requirements.

The plaintiff looks to represent the following three classes:

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