Tenant Screening Reports and the FCRA

Landlords run tenant screening reports when potential tenants apply for housing.  The cost of the tenant background reports is low, but background report errors can lead to high costs for tenants, including expensive deposits, or even worse – denied housing.  Most tenant screening reports include criminal records and rental history, including evictions.  Some tenant background reports may include name variations, employment history and bankruptcies. 

Tenant Screening Reports Are Consumer Reports

The Fair Credit Reporting Act (“FCRA”) defines a “consumer report” as bearing on a consumer’s “credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living.” 15 U.S.C. §1681a(d). Tenant reports are consumer reports under the FCRA. United States v. First Advantage SafeRent, Inc. No. 8.10-cv-00090-PJM (D. Md. Jan. 14, 2010); see also Cotto v. Jenney, 721 F.Supp 5 (D. Mass 1989).

Tenant Screening Companies Are Consumer Reporting Agencies

Companies who collect and maintain rental history and information on tenants and sell tenant reports to landlords are consumer reporting agencies.  A consumer reporting agency is defined as a person who “regularly engages in whole or part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties. . .” 15 U.S.C. §1681a(f). A “nationwide specialty consumer reporting agency” is a consumer reporting agency who compiles and maintains files on a nationwide basis relating to consumers’ residential or tenant histories.  15 U.S.C. §1681a(w).  Thus, the tenant reporting companies are subject to the requirements of the FCRA.

Tenant screening companies are also held to the same accuracy reporting standards as the nationwide consumer reporting agencies, such as Trans Union, Equifax and Experian. This means that a tenant screening company must reinvestigate disputed inaccurate items within 30 days of dispute, to have in place reasonable procedures to respond to identity theft claims and all other provisions under the FCRA. See 15 U.S.C. §1681i(a)(1)(A).  Likewise, tenant screening companies must have and follow policies and procedures to assure the maximum possible accuracy of the background reports.  15 U.S.C. §1681e(b); see also Valentine v. First Advantage SafeRent (C.D. CA 2009).

The FCRA also provides tenants (consumers) with rights and remedies under federal law. For example, if a person is denied rental housing due to information contained in a tenant report, the landlord or management company must notify the potential renter of the adverse action. See 15 U.S.C. §1681a(k)(1)(B)(iv). The notice must provide the name of the company that provided the report and allow the renter to order a free copy of the tenant report within 60 days after the denial.

Have you been denied housing?  Was the housing denial based on errors in your tenant screening report?  You may be entitled to money damages under the FCRA.  Contact us at 1-800-263-9091 for a free case review 24/7.