Consumer reporting firm to pay $2.25 million to settle tenant screening violations: DOJ

A federal court has entered a stipulated order resolving a Justice Department case against RentGrow Inc., a consumer reporting company. The order imposes a $2.25 million civil penalty judgment over allegations that the company violated the Fair Credit Reporting Act and the Federal Trade Commission Act in connection with tenant screening reports it provides to landlords and property managers, the Justice Department announced.

The case stemmed from an investigation by the Federal Trade Commission, which referred the matter to the Justice Department, according to the department. RentGrow furnishes background reports used by landlords and property managers to screen prospective tenants for rental housing.

In a complaint filed in the U.S. District Court for the District of Columbia, the government alleged that RentGrow violated the Fair Credit Reporting Act by failing to maintain reasonable procedures to ensure the maximum possible accuracy of information in its tenant screening reports. The government also alleged that the company failed to disclose to consumers, upon request, the information contained in their reports and the sources of that information, and failed to follow required procedures when consumers disputed the accuracy of their reports, the Justice Department said.

Additionally, the government alleged that RentGrow violated the FTC Act’s prohibition on deceptive business practices by misrepresenting to tenant applicants that, following successful disputes, corrections to or removals of inaccurate information from their reports were reported to landlords and property managers, according to the complaint.

“Tenant screening reports can significantly affect the outcome of a housing application. Consumers deserve to know that the information contained in those reports is accurate, that the reporting is transparent, and that they have a meaningful opportunity to address information that may affect them,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Justice Department is committed to ensuring that companies that collect and provide consumer information follow the law and maintain practices that support fair and informed housing decisions.”

Beyond the $2.25 million civil penalty, the stipulated order imposes an injunction prohibiting RentGrow from engaging in the alleged misconduct and requires the company to comply with related reporting, monitoring and recordkeeping obligations, the Justice Department said.

The United States was represented in the case by Assistant Director Zachary A. Dietert and Trial Attorney Jordan A. Ryan of the Enforcement Section within the Civil Division’s Enforcement and Affirmative Litigation Branch, according to the department. The FTC was represented by Whitney Moore, Jamie Hine and Kamay Lafalaise.