background check lawsuit

The convenience store chain 7-Eleven recently paid out nearly $2 million to settle a class-action lawsuit that alleges it violated the Fair Credit Reporting Act (FCRA). The class-action lawsuit—Munoz v. 7-Eleven, Inc., filed in the state of California—spans approximately 50,000 job applicants. In addition to the settlement payout, the lawsuit will push 7-Eleven to correct its employee background check process to ensure FCRA compliance in the future.

The alleged violations involve the part of the FCRA that requires employers to utilize a standalone disclosure document when informing candidates about background checks. Under FCRA rules, the background check disclosure can either be provided as a standalone form or combined with the background check consent/authorization form. The form cannot include any other information, whether details about the job, employer, or background check provider. The idea is that the disclosure form or disclosure/authorization form will give candidates or employees complete clarity about what they are authorizing an employer or prospective employer to do during the vetting process.

Per a report from HR Dive, the lawsuit against 7-Eleven argues that the employer included extra information on its disclosure form, including details about the background check provider and relevant state laws. The form also asked for “a blanket authorization allowing the disclosure of information directly to 7-Eleven.”

7-Eleven ultimately agreed to settle the lawsuit, paying $1,972,500 to the class of applicants.

HR Dive noted that several other major companies have had recent legal troubles related to FCRA background check disclosures. These companies include Frito-Lay and Delta Air Lines. Walmart is also facing a lawsuit for background checks that have allegedly had a disparate impact on minority applicants. In total, HR Dive said companies have paid out approximately $174 million in the past decade just to settle background check lawsuits.

Because most employers use the same basic background check process for every candidate they screen, a single lapse in FCRA compliance can snowball into a large and costly class-action lawsuit, especially for large national or multinational organizations: the impact of an FCRA faux pas will be amplified across many different locations. The 7-Eleven class-action case will cost the business about $40 per applicant, but that amount adds up given the number of class members.

Including unnecessary information or language in a disclosure is one of the most common violations of FCRA compliance. Many employers are unclear on which information is considered necessary for this form and which information is considered extraneous. For this reason, it is extremely important for employers to educate themselves on the finer points of FCRA compliance before implementing a new background check strategy.

At Blinkx, we are happy to help by providing Learning Center pages that highlight important details about the FCRA and FCRA compliance. If you have any additional questions in this regard, feel free to contact us directly.



Photo of author

Author Pepe

Thank you for visiting

Leave a Comment

Business Finance

About Us

Business Finance News is a brand oriented to business owners and dedicated to analyzing and comparing the cost and conditions of B2B procurement of goods and services through free quotes delivered by business partners.


Address 5050 Quorum Drive, (75254) Dallas TX

telephone 844-368-6072


A personal loan is a medium term loan with a fixed interest rate that is repaid in equal monthly payments and it's usually limited to 24 months. Loan offers and eligibility depend on your individual credit profile. Our lenders can help you obtain as much as $3,000 depending on the lender, your state and your financial situation.

The owner and operator of is not a lender and is not involved into making credit decisions associated with lending or making loan offers. Instead, the website is designed only for a matching service, which enables the users contact with the lenders and third parties. The website does not charge any fees for its service, nor does it oblige any user to initiate contact with any of the lenders or third parties or accept any loan product or service offered by the lenders. All the data concerning personal loan products and the industry is presented on the website for information purposes only. does not endorse any particular lender, nor does it represent or is responsible for the actions or inactions of the lenders. does not collect, store or has access to the information regarding the fees and charges associated with the contacting lenders and/or any loan products. Online personal loans are not available in all the states. Not all the lenders in the network can provide the loans up to $3,000. cannot guarantee that the user of the website will be approved by any lender or for any loan product, will be matched with a lender, or if matched, will receive a personal loan offer on the terms requested in the online form. The lenders may need to perform credit check via one or more credit bureaus, including but not limited to major credit bureaus in order to determine credit reliability and the scopes of credit products to offer. The lenders in the network may need to perform additional verifications, including but not limited to social security number, driver license number, national ID or other identification documents. The terms and scopes of loan products vary from lender to lender and can depend on numerous factors, including but not limited to the state of residence and credit standing of the applicant, as well as the terms determined by each lender individually. 


APR (Annual Percentage Rate) is the loan rate calculated for the annual term. Since is not a lender and has no information regarding the terms and other details of personal loan products offered by lenders individually, cannot provide the exact APR charged for any loan product offered by the lenders. The APRs greatly vary from lender to lender, state to state and depend on numerous factors, including but not limited to the credit standing of an applicant. Additional charges associated with the loan offer, including but not limited to origination fees, late payment, non-payment charges and penalties, as well as non-financial actions, such as late payment reporting and debt collection actions, may be applied by the lenders. These financial and non-financial actions have nothing to do with, and has no information regaining whatsoever actions may be taken by the lenders. All the financial and non-financial charges and actions are to be disclosed in any particular loan agreement in a clear and transparent manner. The APR is calculated as the annual charge and is not a financial charge for a personal loan product. 

Late Payment Implications

It is highly recommended to contact the lender if late payment is expected or considered possible. In this case, late payment fees and charges may be implied. Federal and state regulations are determined for the cases of late payment and may vary from case to case. All the details concerning the procedures and costs associated with late payment are disclosed in loan agreement and should be reviewed prior to signing any related document. 

Non-payment Implications

Financial and non-financial penalties may be implied in cases of non-payment or missed payment. Fees and other financial charges for late payment are to be disclosed in loan agreement. Additional actions related to non-payment, such as renewals, may be implied upon given consent. The terms of renewal are to be disclosed in each loan agreement individually. Additional charges and fees associated with renewal may be applied. 

Debt collection practices and other related procedures may be performed. All the actions related to these practices are adjusted to Fair Debt Collection Practices Act regulations and other applicable federal and state laws in order to protect consumers from unfair lending and negative borrowing experience. The majority of lenders do not refer to outside collection agencies and attempt to collect the debt via in-house means. 

Non-payment and late payment may have negative impact on the borrowers’ credit standing and downgrade their credit scores, as the lenders may report delinquency to credit bureaus, including but not limited to Equifax, Transunion, and Experian. In this case the results of non-payment and late payment may be recorded and remain in credit reports for the determined amount of time.