On July 9, the FTC announced a proposed settlement in the form of a proposed stipulated order, which, pending court approval, would resolve a complaint filed the same day in the U.S. District Court for the District of Columbia against a tenant screening company that furnishes background screening reports to landlords and property managers. The complaint alleges violations of the FCRA and Section 5 of the FTC Act, asserting that the company qualifies as a “reseller” under the FCRA because it compiles tenant screening reports using information obtained from other consumer reporting agencies (CRAs). It alleges the company failed to follow reasonable procedures to assure the maximum possible accuracy of its reports, including by permitting the same criminal conviction or eviction proceeding to appear as multiple separate entries, which made applicants’ criminal and eviction histories look more extensive than they actually were, even when the underlying data was accurate.

The complaint further alleges that the company failed to disclose to consumers, upon request, all sources of information in their files, including a third-party database used to supplement address history and name information for matching public records to applicants, and that it failed to satisfy other FCRA requirements applicable to resellers, including forwarding certain disputes to the CRAs that supplied the disputed information. It also alleges that when consumers successfully disputed information in their reports without a change to their overall screening result, the company told those consumers that landlords had been notified of the update, even though its corresponding notice to landlords made no reference to any change, in violation of Section 5 of the FTC Act.

The proposed stipulated order, under which the company neither admits nor denies the allegations, would require the company to pay a $2.25 million civil penalty to the Treasury within seven days of entry. It would permanently bar the company from failing to maintain reasonable procedures to prevent duplicate reporting of the same criminal or eviction proceeding, from failing to disclose vendors used as sources of address history or name data in response to consumer file requests, and from misrepresenting to consumers whether landlords have been notified of updates to a disputed tenant screening report. The order would also require the company to submit a compliance report within one year and maintain compliance records for 10 years, subject to monitoring by the FTC and DOJ, and would terminate 10 years after entry.