FTC Warns Websites Offering Tenant Rental Histories of FCRA Obligations

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The Federal Trade Commission sent warning letters to six companies operating websites that provide tenant rental history reports to landlords that they may be subject to the requirements of the Fair Credit Reporting Act, the FTC announced April 3.  

According to the letter, once an entity is deemed to be a consumer reporting agency (CRA), it is required to comply with FCRA, 15 U.S.C. § 1681. This includes organizations such as the letter's recipients--namely, companies that “assemble or evaluate information on individuals' rental histories and provide this information to landlords so that they can screen tenants.”

FCRA Requirements

Once an organization is determined to be a CRA, the letter explained, “the FCRA requires you to take several steps to ensure the fairness, accuracy, and confidentiality of the consumer reports you provide.”

FCRA requires CRAs to, among other things:

• take reasonable steps to ensure that each landlord to whom a consumer report is provided is in fact using the report for tenant screening purposes, and not as a pretext for an impermissible purpose (e.g., for spying on a neighbor or marketing to potential tenants);

• take reasonable steps to ensure the maximum possible accuracy of the information provided; and

• provide consumers with copies of their reports upon request and allow them to dispute information that they believe is inaccurate.

 

The letter reminded recipients that they also have obligations related to the landlords that use the consumer reports, as well as their sources of information. In addition to notifying sources of their obligation to provide accurate information, the CRAs must tell landlords that if they deny housing on the basis of the consumer reports provided, the landlords “must provide the applicant with notice of that fact, along with information about the applicant's right to receive a free copy of his or her report, and the applicant's right to dispute information they believe to be inaccurate.”

Although the letters point out that the commission has not made a determination whether the companies have violated the law, it encouraged the recipients to review their business practices to ensure compliance. It also cautioned the companies that the commission “reserves the right to take action against you based on past or future law violations; your practices also may be subject to laws enforced by other federal, state, or local law enforcement agencies.”


A sample letter is available at http://www.ftc.gov/os/2013/04/130403tenantblacklistingletter.pdf.