Facts

IntelliCorp Records Inc. is a software company whose services include employee verification, and criminal background checks. One of its most popular products was the Criminal SuperSearch (CSS), which enabled a prospective employer to log onto IntelliCorp's website to review any job applicant's criminal record immediately.

Plaintiffs filed a class action against IntelliCorp claiming that its CSS service violated the Fair Credit Reporting Act.

PLAINTIFFS' CONTENTIONS:
Various individuals who were negatively affected by IntelliCorp's CSS service argued that IntelliCorp violated the FRCA by not using "reasonable procedures" to ensure the accuracy of the reports that they provided to employers. They claimed that IntelliCorp had issued inaccurate and incomplete reports about them to their prospective employers, costing them jobs.

Furthermore, plaintiffs claimed that IntelliCorp violated an FRCA requirement to notify consumers whenever it furnished and sold a consumer report to an employer.

DEFENDANT'S CONTENTIONS:
IntelliCorp denied plaintiffs' allegations and claimed they were in compliance with the FCRA at all times. IntelliCorp contended that its processes for researching and providing criminal background information are extremely thorough and in compliance with all federal and state laws, and that it provides prompt notice to the subjects of its reports whenever such notice is required. IntelliCorp claimed that the cases wouldn't have been certified as class actions if the parties had continued to litigate rather than settle, and that it settled solely for the purpose of avoiding the burden, expense, risk and uncertainty of continuing the litigation.

Result

The parties settled. Without any admission of liability, IntelliCorp agreed to create an $18.6 million settlement fund to benefit members of the settlement class. In addition to the monetary relief, IntelliCorp also agreed to injunctive relief, including changes to its marketing practices.