TransUnion Sold Expunged, Sealed Records to People-Search Websites, Class Action Alleges

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TransUnion LLC and TransUnion Risk and Alternative Data Solutions (TRADS) face a proposed class action over their alleged sale or licensing of expunged or sealed consumer background information to people-search, background reporting websites who in turn sell the data to the general public. 

The 24-page complaint alleges TransUnion and TRADS have run afoul of the federal Fair Credit Reporting Act (FCRA) by improperly including in the data sold to third parties expunged criminal records that were then published and sold by the background-information sites and other clients. The suit says TransUnion and TRADS in fact received from the plaintiffs legal, court-ordered notice to remove their expunged records from those that were sold/licensed, yet did nothing. 

“Plaintiffs in this case come from a group of Texas-based, former subscribers of an online expungement assistance service, whose expunged or sealed records still appeared for sale on the Background Websites anywhere from one to two years after notices were provided demanding their immediate removal,” the suit states. “In each case, the notice provided included a court order of removal from a Texas judge, which was not followed.” 

According to the filing, TransUnion and TRADS knew or should have known that their licensees/clients were violating the FCRA and both the Texas Expungement Removal Act and Deceptive Trade Practices Act and thus should have intervened to stop the alleged conduct. Nevertheless, they failed to do so, the case alleges. 

The lawsuit contends that TransUnion’s release of expunged criminal records to third parties amounts to a potentially criminal offense given the knowing publication of expunged records for a profit is a second-degree felony in Texas. 

More broadly, the case claims TransUnion’s apparent misconduct completely undermines the expungement or record-sealing efforts of all 50 states as a measure to remove or minimize the existence of a criminal history as a barrier to employment, credit, housing and insurance. As the lawsuit tells it, the proliferation of for-profit background check companies has made it nearly impossible for an individual to hurdle every logistical and financial obstacle to ensure an expunged criminal record is kept out of the open. 

“As a result of this ‘Wild West’ situation in the background screening industry, expunged records can be, and are, available for anyone to view for months or even years while, simultaneously, remaining unknown and undiscoverable to the individuals reported upon,” the complaint says. 

Per the suit, the websites that were caught selling the plaintiffs’ expunged records exist within a subcategory that “demands heightened scrutiny and caution,” in particular with regard to their work with national credit reporting agencies like TransUnion. These websites, the case says, disclaim that the federal FCRA applies to them at all on the premise that none of the site’s subscribers use them to screen for employment, housing or credit, i.e., activities that trigger statutory protection. 

The lawsuit claims TransUnion and TRADS were aware the background websites disclaim that they provide accurate data on consumers. It is unlawful for a national credit bureau to participate and partner with businesses that publish expunged and sealed records with such frequency that they must disclaim the accuracy of their content, the suit contends. 

The lawsuit looks to cover all U.S. residents whose expunged or sealed records were licensed or sold by TransUnion-TRADS for eventual publication. 

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