The Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB) obtained a settlement that will require credit reporting agency Trans Union LLC and a subsidiary to pay a total of $15 million to settle charges they failed to ensure the accuracy of tenant screening reports by including inaccurate and incomplete eviction records about consumers, hampering their ability to obtain housing.
In a complaint filed in federal court, the FTC and CFPB say that Colorado-based TransUnion Rental Screening Solutions, Inc. (TURSS) and its parent company, Trans Union LLC, based in Chicago and commonly known as TransUnion, violated the Fair Credit Reporting Act (FCRA) by failing to ensure the accuracy of the information included in their tenant background screening reports.
“Consumers struggling to find housing shouldn’t be shut out by tenant screening reports that are ridden with errors and based on data from secret sources,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Protecting consumers looking for housing is critical to a fair economy, and we are proud to partner with the CFPB in obtaining this record-breaking order.”
“Americans across the country were put at risk of wrongful housing denials because TransUnion failed to follow the law,” said CFPB Director Rohit Chopra. “We are ordering TransUnion to cease its yearslong illegal activity, clean up its broken business practices, redress its victims, and pay penalties.”
TURSS provides background screening reports about consumers to thousands of clients, including rental property owners, property management companies, employers, and other background screening companies, for tenant and employee selection. These reports may include information about consumers’ criminal and eviction records, including the amount sought by a landlord in court, any judgment amount the court may award, and the amounts owed by consumers. Trans Union LLC manages and oversees TURSS’s compliance with the FCRA.
Inaccurate and outdated information in tenant screening reports can significantly hamper consumers’ ability to find housing, costing them time and money by prolonging their search for housing, requiring them to pay additional application fees and spend time correcting errors in their background reports.
TURSS obtains eviction records from third-party provider LexisNexis Risk and Information Analytics Group, Inc. but has failed to take steps to ensure the accuracy of the data it was provided, according to the complaint. The FTC and CFPB say TURSS failed to follow reasonable procedures to: prevent the inclusion of multiple entries for the same eviction case; accurately report the disposition of eviction cases it included in its reports; accurately label the monetary amounts associated with those cases; and prevent the inclusion of sealed eviction records in its background reports.
Until April 2021, TURSS often reported developments in the same eviction proceeding as separate events, making it appear as if a consumer had more than one eviction, according to the complaint. The company took steps to change that practice only after learning of the FTC’s investigation. The company also failed to follow reasonable procedures to accurately report the outcome of evictions, such as reporting an eviction was filed without reporting that it was also dismissed months or years before, or reporting that a landlord was awarded a judgment in an eviction proceeding when the case was actually dismissed.
The company also included inaccurate labels in its reports that mischaracterized the nature of certain information in consumers’ eviction records, according to the complaint. The company labeled money that a landlord claimed a consumer owed as “Judgment Amount,” giving the false impression that this was the amount awarded by a court. The complaint also charges that TURSS failed to put in place reasonable procedures to prevent eviction records that had been sealed, or restricted from public view, by a court from appearing in its reports.
The FTC and CFPB also say that TURSS violated the FCRA by failing in many instances to provide consumers with the names of third-party vendors from whom it received criminal and eviction records included in its tenant screening reports, which made it harder for consumers to correct errors in their background reports.
Under the proposed order, which must be approved by a federal court before it can go into effect, TURSS and Trans Union LLC will be required to pay $11 million, which will be used to compensate consumers, and a $4 million civil penalty, which will go to the CFPB’s civil penalty fund. This is the largest amount ever recovered in an FTC tenant screening matter. In addition, the companies must also take steps to address the allegations of the complaint and help enable consumers to dispute inaccurate information in the future, including:
- Put in place procedures to ensure the accuracy of information they provide about consumers in background screening reports, particularly information related to evictions;
- Design procedures to prevent the inclusion of the types of problematic records detailed in the complaint including sealed records, unresolved eviction cases, multiple filings for a single eviction case, and any monetary amounts other than final judgments;
- Disclose the sources of information in a consumer’s file, including identifying third-party vendors;
- Implement practices and procedures that will help the companies identify future problems with criminal and eviction records and take corrective steps to fix them;
- Provide consumers upon request and at no charge all the information in their file at the time of the request, including any information that TURSS might provide to a landlord or property manager; and
- Make available on TURSS’s website a sample “adverse action notice letter” that landlords can use when they turn down applicants for housing, which will prompt the landlord to share the applicant’s tenant screening report and tell them why they are denying their application.
The Commission vote authorizing the staff to file the complaint and stipulated final order was 3-0. The FTC and CFPB filed the complaint and stipulated final order in the U.S. District Court for the District of Colorado.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.
The lead staffers on this matter are Jarad Brown and Whitney Moore in the FTC’s Bureau of Consumer Protection.