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Wisconsin employers, particularly those in the Green Bay and Fox Cities area, need to be on the alert for individuals who pose as job applicants solely to obtain a copy of your background check authorization form.
Once they obtain a copy of your authorization form, these pseudo-applicants will scrutinize the form for possible legal claims they could bring against you under the federal Fair Credit Reporting Act ("FCRA"). If they see any possible weakness in the form or in your procedures, then they send a letter demanding an exorbitant amount of money in order to avoid a lawsuit (including threating a class action). A copy of the actual demand letter one of these individuals is using to seek tens of thousands of dollars from northeast Wisconsin employers can be viewed by clicking here.
FCRA requires that Authorization forms for pre-hire background screens, and other forms relating to such screening, comply with very specific requirements. The provisions of FCRA are extremely technical (as you can see from the information in the demand letter). Even if the job applicant is offered or awarded the job and suffers no harm, there is still a possibility for a substantial recovery. Because of this, FCRA claims are "low hanging fruit" for plaintiffs, including pseudo-applicants who have no intention of accepting a job if offered. FCRA claims are also a common basis for initiating class actions (which is why a threat by even one applicant can be a significant financial exposure). FCRA lawsuits are one of the fastest growing categories of litigation nationwide.
Many employers presume they are not covered by FCRA because they are not conducting "credit" checks. However, this is an incorrect assumption. Although the "Fair Credit Reporting Act" contains the word "Credit" in its title, the statute applies to far more than just traditional credit checks. In fact, FCRA covers practically any form of investigation or screening conducted by anyone other than an employee of your company. This includes, for example, criminal conviction checks, background reference checks, educational degree verifications, prior work verifications, confirmation of licensing, and other efforts to verify, review or confirm information on a job application or resume. It also covers similar inquiries or investigations of the individual after they become employed.
As you can see from the demand letter from the pseudo-applicant, a number of employers have been forced to pay large amounts to settle threatened FCRA claims. The individual who sent this letter has applied to many businesses in our area, both large and small, hoping to secure additional settlements.
We have permission from the client who received the letter in this article to circulate it to our other clients to help make other businesses aware of this threat. We can provide you with the name of the imposter job applicant who sent the letter if you call one of our employment law team members.
We are encouraging all our clients to have their FCRA forms/procedures reviewed for current compliance. Even if you are using sample FCRA forms supplied by your background investigation service, or even if you have had your forms provided or reviewed by legal counsel in the past, we strongly advise you to have your forms re-evaluated by counsel. (Background investigation services which provide sample forms will often provide a warning to the user disclaiming legal responsibility for the forms and recommending that the forms be reviewed by legal counsel before using.)
Please let us know if you would like assistance in evaluating your FCRA background screening authorization or other forms, if you have questions about the FCRA procedures or if you would like more information about the individual who sent the demand letter discussed in this article.
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