- within Cannabis & Hemp and Insolvency/Bankruptcy/Re-Structuring topic(s)
On July 9, the FTC announced that the Department of Justice filed a complaint and proposed stipulated order against a tenant-screening company. The proposed settlement would resolve allegations that the company violated the Fair Credit Reporting Act (FCRA) and the FTC Act and require it to pay a $2.25 million civil penalty.
The complaint, filed in the U.S. District Court for the District of Columbia, alleges that the company operates as a consumer reporting agency by compiling information from multiple sources into tenant-screening reports sold to landlords and property managers. According to the complaint, the company allegedly:
- Failed to maintain reasonable accuracy procedures. Reports allegedly included duplicate records and multiple entries for the same criminal or eviction proceeding, creating the appearance of additional convictions or eviction actions.
- Provided incomplete file disclosures. The company allegedly failed to identify all sources of information used in its reports, including a source of historical addresses and middle names used to match applicants with public records.
- Mishandled consumer disputes. Certain disputes involving duplicate or subsequently updated records were allegedly labeled invalid without the company taking the additional steps required under the FCRA.
- Misrepresented dispute outcomes.The company allegedly told some consumers that corrected information had been reported to property managers while informing those property managers that no change had occurred.
Under the proposed order, the company would be required to implement procedures designed to prevent duplicate criminal and eviction records, comply with the FCRA’s file-disclosure and dispute requirements, and accurately describe whether updated reports were provided following successful disputes. The order will become binding if approved by the court.
Putting It Into Practice: The settlement reflects the FTC’s continued efforts in consumer protection enforcement activity (previously discussed here and here). Tenant screening companies should test record-matching and deduplication controls and document all data sources. Moreover, these companies should continue monitoring FCRA enforcement and update their compliance procedures as necessary.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
