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Tenant screening reports can risk—even ruin—renters’ chances

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For immediate release

Tenant screening reports—the background reports that landlords rely on to vet potential renters—can’t always be trusted for accuracy. Yet what lurks in the databases could mean the difference between having housing and not. Landlords turn to tenant screening reports to learn if an applicant has a history of collections, bankruptcy, eviction, or a criminal record. But these automated background reports, often based on public records, can be flawed.

In the latest issue of Consumer Action News, the organization’s quarterly newsletter, we report on how applicants’ rental history is often mismatched, tagging people with crimes and evictions that don’t belong to them, according to an investigation by the New York Times and the Markup. 

Unfortunately, not all screening companies verify the rental and criminal histories they provide to landlords. In 2018, the Federal Trade Commission sued and settled a case with the tenant screening company RealPage for attributing criminal records to the wrong people.

In the days ahead, inaccurate tenant screening reports may be even more dangerous. At the end of July the pandemic-related eviction moratorium expired, leaving more than 11 million renters, each owing thousands in back rent, with no backstop. (Billions in federal funds have not yet been disbursed through state and local programs to repay overdue rent.) It’s feared that millions of people will be evicted from their homes without the ability to find a new place to live, because even an incomplete eviction filing can automatically disqualify renters.

Consumer recourse

Landlords are required to tell an applicant if their rental application was rejected based on a tenant screening report and to name the company that supplied it. Under the Fair Credit Reporting Act, these applicants are entitled to a free copy of the screening report and have the right to dispute inaccurate information. But it’s highly unlikely the disputes will be resolved before the place is rented to another tenant. Inaccurate and incomplete reports unfairly burden renters, yet, despite their obvious problems, are regularly relied on.

As our nation climbs out of the COVID crisis, the Consumer Financial Protection Bureau (CFPB) has put landlords and credit bureaus on notice of their obligation to accurately report rent and eviction information, and will be closely monitoring complaints from renters about tenant screening reports.

In order to even the playing field, many believe that eviction cases won by tenants, or those based on inaccurate information successfully disputed, should be sealed. That way, they would not show up on screening reports. Click here for our story “Screening out fairness.”

Stories in this issue of Consumer Action News include:
•    Legal protections for renters
•    Tips to combat an imperfect rental history
•    Small landlords rely on screening reports, but need rental assistance too

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Consumer Action has been a champion of underrepresented consumers nationwide since 1971. A nonprofit 501(c)(3) organization, Consumer Action focuses on consumer education that empowers low and moderate-income and limited-English-speaking consumers to financially prosper. It also advocates for consumers in the media and before lawmakers to advance consumer rights and promote industry-wide change.

By providing consumer education materials in multiple languages, a free national hotline, a comprehensive website (www.consumer-action.org) and annual surveys of financial and consumer services, Consumer Action helps consumers assert their rights in the marketplace and make financially savvy choices. More than 6,000 community and grassroots organizations benefit annually from its extensive outreach programs, training materials and support.

 

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