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Consumer Finance Insights
October 19, 2023

FTC and CFPB Announce $15 Million Settlement Against Credit Reporting Agency For Alleged Inaccuracies In Tenant Screening Reports

​On October 12, 2023, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) announced that they filed a joint complaint​ and obtained a $15 million settlement​ against a parent credit reporting agency and one of its subsidiaries for alleged violations of the Fair Credit Report Act (FCRA) with respect to tenant and employment background screening reports. The companies allegedly failed to follow reasonable procedures to ensure accurate eviction records in the screening reports, and also allegedly failed to identify third party vendors that provided criminal or eviction records to consumers.

The complaint alleges that credit reporting companies’ failure to follow reasonable procedures to accurately report the outcome of evictions resulted in inaccuracies in tenant screening reports, including reporting evictions without also reporting that said eviction was dismissed, or stating inaccurate outcomes in eviction proceedings. The companies allegedly also inaccurately labelled information in the tenant screening reports, as well as failing to provide consumers with the third-party vendors who provided criminal and eviction records included in the reports, further increasing the difficulty for consumers attempting to correct the erroneous information. Upon announcing the settlement, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection commented “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. 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.”

If the proposed order is approved by the federal court, the credit reporting companies will be required to pay $11 million in consumer compensation, a $4 million civil penalty to the CFPB, and will result in injunctive relief, including compliance reporting and monitoring, enhanced recordkeeping requirements, and cooperation with the CFPB and FTC to ascertain the identities of injured individuals.

The post FTC and CFPB Announce $15 Million Settlement Against Credit Reporting Agency For Alleged Inaccuracies In Tenant Screening Reports appeared first on Consumer Finance Insights (CFI).