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One Eviction, Reported Three Times

A tenant screening company will pay $2.25 million after the FTC said its reports counted the same court record over and over. In one case, two records showed up as fifteen.

By Online Business Check Editorial Team, Newsroom
Published
Photo: Cjp24 / Wikimedia Commons — CC BY-SA 4.0

Somebody applied for an apartment and got turned down. Their background report listed fifteen criminal charges across seven records.

They disputed it. All fifteen records came off. The denial was reversed, and they got the apartment.

That case sits in a complaint the Justice Department filed on July 9 against RentGrow, the company behind a screening product called ScreeningWorks Pro, which the FTC says sells to thousands of landlords and property management companies. RentGrow has agreed to pay a $2.25 million civil penalty to settle it.

Two things to be precise about before going further. The money is a penalty paid to the U.S. Treasury; it is not a fund for renters, and there is no claims process. And the settlement is proposed, not final — a judge still has to sign it. RentGrow admits nothing.

What the FTC says went wrong

The core allegation is almost mundane, which is what makes it bad. RentGrow, the complaint says, did not stop the same court record from being counted twice.

A single eviction case generates several events on its way through a courthouse — the initial filing, then a judgment. The FTC says those events showed up on reports as separate evictions. One report turned two eviction cases into three. Another turned two records into six. And when the vendors supplying the raw data sent it over grouped correctly, with clear headers, the complaint says RentGrow "disregarded that formatting in favor of its own."

The agency's language is unusually flat about the fix that wasn't there. RentGrow, it says, "failed to implement any procedures at all."

Then there is the part that reads worse. When a renter disputed a report and won, the FTC says RentGrow told them: "The investigation is complete and the results are attached. Additionally, we notified the property where you applied that your Tenant Screening Report has been updated."

What it actually sent the landlord, when the accept-or-decline outcome hadn't changed, was this: "The investigation is complete and there were no changes to the applicant's screening result."

The FTC charged that as deception under Section 5 of the FTC Act. It also alleged RentGrow marked whole categories of disputes "invalid" — including duplicate-record disputes — rather than investigating them or passing them up the chain, and that it never told consumers it was using LexisNexis Accurint to match names and addresses to court records.

"Inaccurate background reports can have a real impact on people by affecting their ability to obtain housing or a job." — Christopher Mufarrige, Director, FTC Bureau of Consumer Protection

The complaint spells out what "real impact" means in practice: "prolonged housing searches, additional application fees, higher rental payments and security deposits, or even denial of housing."

The FTC says it had been hearing about this since at least 2018, and that nothing changed until it opened an investigation.

What the settlement actually requires

Under the proposed order, RentGrow would be permanently barred from reporting the same criminal or eviction proceeding more than once — and the order closes the obvious loophole, adding "whether or not the record is enumerated as a separate record." It has to disclose the vendors it uses for address and name matching, LexisNexis Accurint among them. It has to handle reseller disputes properly, which means deciding within five business days whether its own error caused the problem, correcting it within twenty days if so, and forwarding the dispute to the source if not. And it can't tell renters it notified their landlord of a correction when it didn't.

The order runs ten years. Compliance reports, record retention, the works.

One number the FTC never gives: how many people were affected. We looked for it in the complaint, the order and the case page. It isn't there, and we're not going to estimate it.

If you're a landlord, this is your problem too

Not because the order binds you. It doesn't — it binds RentGrow only. But the moment you pull a background report on an applicant, you are using a consumer report, and the FCRA is now your law as well.

The FTC's own guidance for landlords, Using Consumer Reports: What Landlords Need to Know, is short and worth ten minutes of your time. The part most small landlords get wrong is what counts as "adverse action." It is not just saying no. Per the FTC, it includes:

  • Denying the application
  • Requiring a co-signer on the lease
  • Requiring a deposit you wouldn't require of another applicant
  • Requiring a larger deposit
  • Charging a higher rent than you'd charge someone else

Do any of those because of what was in a report, and you owe the applicant an adverse action notice with the screening company's name, address and phone number, a statement that the company didn't make the decision, and notice that they can dispute the report and get a free copy within 60 days. The FTC is explicit that you owe the notice "even if information in the consumer report wasn't the primary reason" you said no.

The FTC also warns that a blanket policy of refusing anyone with a criminal record may violate the Fair Housing Act.

Here's the uncomfortable part, and it's ours, not the FTC's. If a screening report tells you an applicant has fifteen charges when they have two, you're the one who declines them, and you're the one they come back to. The screening company took the fee and made the error. You take the phone call. (That's our read, not a finding by the FTC.)

If you're a renter who got turned down

You have specific rights, and they're written down in plain English on the FTC's site.

Ask for the report. It's free if you request it within 60 days of the landlord's notice. Read it for the exact error the FTC found here — the same case listed twice, an eviction filing and its judgment counted as two evictions. The FTC lists duplicate records as a common error, using almost the same words as the RentGrow complaint.

Then dispute it in writing, with documents, and tell the landlord you've done so. The company generally has 30 days to investigate, 45 in some cases. If the information is wrong, incomplete, or can't be verified, it has to be corrected or deleted, and you can ask them to send the corrected report to the landlord.

If the investigation goes nowhere, you can require them to add a statement of your dispute to the file, and to send it to anyone who pulled your report in the last six months. They may charge you for that.

Complaints go to the FTC at ReportFraud.ftc.gov or the CFPB at consumerfinance.gov/complaint.

What This Means for You

If you own rental property: the screening report you buy is not a verdict, and the FTC has now documented a company selling reports that multiplied the same record. You are still the one legally required to send the adverse action notice, and the definition of adverse action is wider than most small landlords realize — a bigger deposit or a co-signer requirement counts. The FTC's landlord guidance is free and it is the cheapest legal reading you'll do this year.

If you or someone in your family was turned down for an apartment: get the report, which is free within 60 days of the denial, and look specifically for the same case appearing more than once. In the case that opens this article, a disputed report went from fifteen records to zero and a denial became an approval.

Sources

Disclaimer: This article is news and general information only. It is not legal advice. The settlement described here was filed but had not been signed by a judge as of publication, and RentGrow has not admitted the allegations.

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