by Derek Gilna

Helen Stokes, a 65-year-old Pennsylvania woman with no criminal record, was nonetheless continually denied credit due to inaccuracies in her background report that a property credit reporting company refused to correct. Consequently, she filed a class-action complaint in federal court that alleged damages as a result of the firm’s violations of the Fair Credit Reporting Act (FCRA).

The Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x, gives consumers whose credit reports are inaccurate a means of redress for such violations. In her complaint, Stokes claimed that the credit reporting company, RealPage, Inc., “adopted and maintained a policy and practice of failing to timely update the criminal record information it maintains to eliminate records of cases that have been expunged, thus not accurately reflecting the final disposition of these cases.”

As a result of these FCRA violations, Stokes said, “Defendant’s practices harm consumers seeking residential leases by prejudicing their prospective landlords with inaccurate adverse information, depriving consumers of valuable congressionally-mandated information.” Most importantly, she added, when individuals like her inquired about the negative items on their credit report, RealPage failed “to provide complete and accurate disclosures of all information [the company] maintains about consumers to those consumers upon request.”

Inaccurate criminal record information in credit reports can result in applicants not only being denied credit, but also the ability to rent housing or obtain mortgages.

RealPage sought to have the case dismissed, to no avail. In October 2016, U.S. District Court Judge John R. Padova found that Stokes had alleged concrete and particularized harm, and allowed the lawsuit and a related case to proceed.

Stokes had been arrested as a result of a domestic altercation involving her ex-husband, and although the charges were dismissed she was continually denied credit. With the help of a legal aid organization she was able to get her arrest record expunged, but RealPage continued to report her arrest as a conviction. As a result, she was denied senior housing twice and teetered on the edge of homelessness.

According to another class member, Ronald Lewis, who had a minor criminal record, “So many doors have been closed in my face, I know what wood tastes like. And because of my record, I can’t even take my kids on school field trips. Do you know how devastating that is?” The goal of the class-action complaint was to force credit reporting companies to provide accurate information with respect to criminal records so applicants are not denied access to credit and other services that impact not only their own lives but their families, too.

According to the Wall Street Journal, “the Federal Trade Commission (FTC) has brought eight cases against background screening companies since 2009 for failing to comply with the Fair Credit Reporting Act (FCRA).... The cases, some involving well known companies such as HireRight, LexisNexis Risk Solutions, Intellicorp and Sterling Infosystems, often result in million dollar settlements with the companies admitting to no wrongdoing.”

Judge Padova certified three classes in Stokes’ lawsuit, consisting of the Expungement class, Source class and Chart class.

The Chart class consists of people who requested a copy of their consumer credit report from RealPage and “received with the disclosure a chart that failed to provide the full address and phone number for every agency responsible for enforcing any provision of the FCRA.” Members of the Expungement class include those about whom RealPage “prepared a consumer report which included information regarding one or more criminal cases which ... had been expunged or sealed and a Lifecycle File identified the record as having been expunged or sealed prior to the date of the report.” The Source class includes people who requested a copy of their report “and received a disclosure containing a criminal record in their file which did not include the identity of the public record vendor which had retrieved the criminal record[s]....”

The class-action suit against RealPage remains pending, with the court granting preliminary approval of a settlement in the case and a related lawsuit on August 3, 2017. Under the terms of the proposed settlement, RealPage will establish settlement funds of $143,000 for the Expungement class and $936,200 for the combined Source and Chart classes. Each Expungement class member will receive funds not to exceed $1,100, while members of the Source class will receive payments of up to $200 each. Attorneys’ fees and costs will not exceed 1/3 of the settlement funds, and each named class representative will receive $10,000.

In addition to the monetary provisions, the parties agreed on injunctive relief that requires RealPage to confirm with its data suppliers that any expunged criminal records are not used to produce tenant screening reports; to produce the “complete chart of federal agencies responsible for enforcing any provision of the FCRA, including the address and any appropriate phone number of each agency,” and post that information on its website; and to “disclose the name of the vendor that retrieved any criminal record information in the consumer’s file at the time of such request.”

A final approval hearing in the case is scheduled for February 6, 2018. See: Stokes v. RealPage, Inc., U.S.D.C. (E.D. Penn.), Case No. 2:15-cv-01520-JP. 

Additional sources: www.law360.com, www.highbeeassociates.com, www.truth-out.org, www.wsj.com

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