TransUnion and its rental screening subsidiary reportedly provided inaccurate reports on consumers’ rental history when conducting tenant background reports. The regulators seek a fine and revised procedures from TransUnion.
10/17/2023 3:20 P.M.
3 minute read
TransUnion and its subsidiary TransUnion Rental Screening Solutions Inc. face a $15 million settlement and procedural remedies to correct tenant screening processes in a complaint filed by the Federal Trade Commission and Consumer Financial Protection Bureau.
The complaint (PDF), filed in the U.S. District Court for the District of Colorado, alleges that TransUnion and its subsidiary (TURSS) violated the Fair Credit Reporting Act by “failing to ensure the accuracy of the information included in their tenant background screening reports,” according to a news release from the FTC.
According to the FTC, TURSS issues background screening reports about consumers to clients such as 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,” the FTC reports.
TransUnion oversees TURSS’s compliance with the FCRA.
TURSS failed to ensure the accuracy of data on eviction records before it was sent to clients, according to the complaint.
The FTC and CFPB also report 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.
- Prevent the inclusion of sealed eviction records in its background reports.
The FTC and CFPB also report that TURSS violated the FCRA by not providing consumers with the names of third-party vendors that issued the criminal and eviction records included in its tenant screening reports, which made it more difficult for consumers to remedy errors in their background reports, according to the news release.
Under the proposed settlement, which the court must approve, TURSS and TransUnion LLC will pay $11 million to compensate consumers and $4 million to the CFPB’s civil penalty fund.
The companies will also be required to remedy the allegations in the complaint and provide resources to consumers to dispute inaccurate information going forward, including:
- Procedures to ensure the accuracy of information they provide about consumers in background screening reports, particularly information related to evictions.
- 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.
- Provide a sample “adverse action notice letter” on the TURSS website 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 CFPB separately filed an order for TransUnion to pay $8 million for providing false information to consumers about security freezes and locks on their credit reports, according to a news release from the bureau.
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