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Class Action Against LexisNexis Survives

A federal judge rules LexisNexis cannot dismiss claims that its background-check service violates the Fair Credit Reporting Act (FCRA). LexisNexis Risk & Information Analytics Group offers a service called Esteem that conducts background checks and informs employers when job applicants have a history of theft or fraud. They also send letters, known as “pre-adverse action letters,” to employees or prospective employees who match their records. The FCRA gives employees the right to review such reports before their employer can take adverse action and requires CRAs to clearly and accurately disclose all information in a consumer’s file upon request. In a federal class action, two individuals claimed LexisNexis violated the FCRA by taking adverse action against them before providing them with a copy of their consumer reports and for refusing to turn over parts of their files. LexisNexis disputed this characterization in a motion to dismiss. The judge refused to dismiss both counts and found that the class can only claim punitive damages for LexisNexis’s refusal to disclose files because the action was willful.

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