Section 607(b) of the Fair Credit Reporting Act requires consumer reporting agencies to follow reasonable procedures to ensure that consumer report information about individuals is as accurate as possible. “Reasonable procedures to ensure the greatest possible accuracy” is not a wish, a hope, or a lofty aspiration. This is the law. The FTC-CFPB’s proposed $15 million settlement agreement with Trans Union and its subsidiary TransUnion Rental Screening Solutions underscores this basic legal principle.
TransUnion Rental Screening Solutions (TURSS), operating under the management and supervision of Tran Union, provides background screening reports on consumers to rental owners, property management companies, employers and other background screening companies. These reports may include a person’s criminal record, as well as information about their eviction history—information that many landlords consider highly relevant when evaluating a consumer’s rental application. Defendant TURSS purchased eviction records from a third-party vendor, LexisNexis Risk and Information Analytics Group.
Considering that landlords may factor eviction records into final rental decisions, it’s easy to see how inaccurate and outdated information can make it harder for people to find housing. Incorrect information on an eviction record can result in a longer search for a place to live, additional filing fees, possible temporary housing costs, and higher rent. Add to this the significant effort that can be required to correct erroneous information on background reports, and you can see why eviction-related errors can cause serious housing problems for consumers.
But according to the complaint, in many cases TURSS lacked reasonable procedures in preparing background check reports, resulting in these gross inaccuracies. TURSS‘ The program allegedly double-counted events related to one eviction proceeding, or even multiple times, in a way that made it appear as if consumers had been subject to multiple evictions. In some cases, the company’s reports incorrectly stated that judgments had been entered in the landlord’s favor when the cases were actually dismissed, or that evictions had begun, but did not include public information about how they were resolved, or even Including if it was months or years ago. Under the “Judgment Amount” tab, the company sometimes lists the amount requested by the landlord rather than the amount actually ordered by the court. The company also has no procedures in place to prevent sealed records from appearing on its reports more than a year after an eviction occurred, but the only record is a “Civil New Filing,” although it has noted that this does not occur under its regular process. Work.
The real-world result for consumers: As a result of the company’s practices, many landlords received background check reports that contained inaccurate information about potential tenants’ eviction histories. Accordingly, the complaint alleges that Defendants violated Section 607(b) of the Fair Credit Reporting Act by failing to follow reasonable procedures to ensure the greatest possible accuracy of information covered by the FCRA.
In addition to the Section 607(b) charge, Count 2 of the complaint alleges that Defendants violated Section 609(a) of the FCRA, which requires consumer reporting agencies to “clearly and accurately disclose to consumers…” . .All messages in consumer‘Documentation at the time of request” and “Information Source”. This statutory “document disclosure” requirement helps consumers dispute inaccurate information at the source, which is a key protective measure to reduce the continuous dissemination of the same inaccurate information or the dissemination of the same inaccurate information to other customers. Possibility of accurate information. But the complaint alleges that in many cases, the document disclosures requested by TURSS failed to identify its third-party vendors as the source of criminal and deportation records. Although the company later changed its practices, the complaint describes TURSS’s failure to disclose required information as “knowingly and recklessly.”
If the court accepts the proposed settlement, TURSS and Trans Union will pay $11 million in consumer restitution and an additional $4 million in the CFPB’s civil penalty fund. What’s more, the proposed order would create far-reaching changes to the way TURSS and Trans Union do business. Among other things:
- Defendants must have procedures in place to ensure the accuracy of consumer information they provide in background screening reports, particularly in connection with deportations.
- Defendant must make changes that specifically address the eviction-related inaccuracies alleged in the complaint. For example, TURSS must develop procedures to ensure that its background screening reports include only one record for each eviction action, and it must stop the harmful multiple counting alleged in the complaint. Additionally, TURSS reports will only include final dispositions. If there is no final disposition—for example, if the landlord files suit but drops the matter without a court hearing—TURSS will not report the eviction case. Additionally, TURSS will report only the amount of the eviction judgment. The company doesn’t report only what landlords allege, nor does it report balances consumers still owe even if they’ve paid off all or part of what they owe. TURSS will develop procedures to prevent reporting of sealed records.
- Defendants must also take steps to enable consumers to exercise their rights under the FCRA and correct inaccurate information. In addition to this, TURSS must provide free document disclosure. In addition, they must include any information they may have provided to the landlord or property manager in connection with the TURSS request. The defendant must also disclose the source of the information and must identify the third-party provider. The defendant must post a sample Adverse Action Notice Letter on the TURSS website for landlords to use when rejecting housing applicants. This letter will advise the landlord to provide the tenant screening report they received and tell the applicant the main reason for denying them housing.
The proposed settlement includes noteworthy compliance recommendations for companies covered by the Fair Credit Reporting Act. Most importantly, Section 607(b) makes sense. The FCRA requires “reasonable procedures to ensure the greatest possible accuracy,” requiring covered companies to implement effective processes, ensure those processes operate effectively, and respond promptly when there is evidence (such as in consumer disputes) that those procedures did not produce results. Take action with “maximum possible accuracy”. Credit reporting agencies also should not limit their reasonable procedures to ensure the accuracy of “who” records (also known as “matches”) but also the accuracy of “what” (the content of those records), even if a consumer has Regardless, there are negative things in their reports.
