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Wells Fargo Settles FCRA Class Action Lawsuit for $12 Million

In order to settle a class action lawsuit brought against them for alleged violations under the Fair Credit Reporting Act(FCRA), Wells Fargo has agreed to pay $12 million in the case of Terrell Manuel, et al. v Wells Fargo Bank, National Association.

Plaintiffs in the lawsuit claim that Wells Fargo Bank hired them, conducted a background check, and then used the results of the report to make an adverse employment decision to terminate their employment.  It is alleged that the employer violated the FCRA due to the following:

  • They failed to provide a clear and conspicuous written background check disclosure in a document that consists solely of the disclosure;
  • They failed to obtain a valid authorization in writing to procure the background check; and
  • They failed to provide a copy of the background check report and FCRA Summary of Rights, and at least 5 business days to respond before taking adverse action.

The settlement agreement consists of two classes. The Adverse Action Class includes persons who applied for employment with Wells Fargo between April 1, 2012 and November 30, 2015, and allegedly had adverse action taken against them, based on the results of their background check report, that wasn’t in compliance with the FCRA’s requirements. The Impermissible Use Class is comprised of individuals who applied for employment between April 1, 2013 and May 31, 2015, and received background check disclosure form that included a release of liability clause which violated the FCRA requirement that the form be a stand-alone document consisting solely of the disclosure. Both classes combined represent more than 250,000 applicants.

To learn more about FCRA best practices click here.

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