On August 11, 2009, the FTC filed complaints in federal court against two companies alleging that they were contracting with an outside consumer reporting agency to conduct background checks that included criminal record reviews without providing the applicant or employee with proper notice.
The complaints in United States v. Quality Terminal Servs. LLC, No. 09cv01853-CMA-BNB (D. Colo. Aug. 11, 2009), and United States v. Rail Terminal Servs. LLC, No. 09cv1111 MJP (W.D. Wash. Aug. 11, 2009) allege that the companies violated the Fair Credit Reporting Act (FCRA) by using the results of the background checks to make hiring and firing decisions that constituted “adverse actions” within the meaning of the FCRA without providing the affected applicants and employees with the required pre-adverse action notices and adverse action notices. The FTC also alleged that in instances where adverse action notices were provided, they did not contain the information required by the FCRA. The separate settlements require the defendants to pay a combined $77,000 in civil penalties, as well as ongoing FTC monitoring of the recordkeeping and reporting provisions of the Act.