A basic "tenant" of credit reporting
Funny thing about the Fair Credit Reporting Act: It’s been around since 1970, it’s broad in scope, and yet a lot of businesses with obligations under the law may not be focusing on compliance. Warning letters the FTC just sent to six companies in a particular line of work underscore the need to double-check your FCRA responsibilities.
The letters went to companies that collect information about tenants’ rental histories and then share it with prospective landlords thinking about renting to a certain tenant. According to FTC staff, “If you assemble or evaluate information on individuals’ rental histories and provide this information to landlords so that they can screen tenants, you are a consumer reporting agency (CRA) that is required to comply with the FCRA.”
That kicks in certain requirements designed to protect the privacy of people whose information is collected. For example, companies collecting and sharing that information have an obligation to make sure that whoever is asking has a legitimate reason — a “permissible purpose” — for getting the info. It’s probably OK if it’s to screen prospective tenants, but what about pretextual reasons like snooping on a neighbor or for marketing purposes? Put that in the NOPE category.
Companies compiling the information also have an obligation to ensure it’s as accurate as possible. If consumers ask, they have to give them copies of their reports and allow them to dispute anything that might be inaccurate.
Companies also have a legal obligation to remind landlords of certain responsibilities they have under the FCRA. For example, if a landlord denies housing on the basis of information in a report, the landlord has to notify the applicant of that fact, give the applicant information about how to get a free copy of their report, and tell them how to dispute info the applicant thinks may be inaccurate.
Here’s who got the warning letters:
- The BlueChip Group LLC – donotrentto.com
- M & R Rental Properties – badtenantlistings.com
- The Landlord Protection Agency – thelpa.com
- National Tenant Network – ntnonline.com
- 123 Rent Inc. – therentersblacklist.com
- Tenancy Bureau Inc. – tenancybureau.us
The letter make it clear that the FTC hasn’t evaluated the companies’ practices to determine if they’re complying with the FCRA, but suggests they visit the Credit Reporting page in the BCP Business Center for FCRA compliance resources.
Not a bad idea, we say.