As we reported throughout the year, class-actions brought against employers under the Fair Credit Reporting Act (“FCRA”) alleging hyper-technical violations are proliferating, with several resulting in multi-million dollar settlements.
But there appears to be a new development in this area. According to a National Law Review article, phony job applicants who have no intention of being employed with the targeted companies are submitting employment applications solely to position themselves as plaintiffs in class action litigation and potentially get a windfall settlement. The National Law Review article reports that the fake applicants typically fill out an online job application (usually with companies that have nationwide operations), sign the background check authorization, and then, after receiving an offer or rejection letter send a demand letter stating that the employer’s background check disclosure form or process does not comply with the requirements imposed by the FCRA and demand huge payouts to settle their claims and avoid the filing of a class action lawsuit.
The FCRA provides for statutory damages ranging from $100 to $1,000 per violation for non-compliance with the FCRA’s notice and disclosure requirements, even where the plaintiff has suffered no actual harm or damag