The Federal Trade Commission continues to keep Fair Credit Reporting Act (FCRA) enforcement at the forefront of its activities, as shown by its recent warnings to operators of six websites that provide information about consumers’ rental histories to landlords.
The warnings include a reminder that under the FCRA, the FTC has authority to seek injunctive relief and/or monetary penalties of up to $3,500 per FCRA violation. The FTC shares FCRA enforcement authority concerning nonbanks with the Consumer Financial Protection Bureau.
The six operators each received identical letters from the FTC warning that if they “assemble or evaluate information on individuals’ rental histories and provide this information to landlords so that they can screen tenants,” the operators are providing “consumer reports” and therefore acting as “consumer reporting agencies” (CRA) under the FCRA. The letters outline specific actions an operator must take if it is a CRA. These include taking reasonable steps to ensure the maximum accuracy of the reports and that each landlord who receives a report is using it for tenant screening and not obtaining it as a pretext for another purpose that is impermissible under the FCRA.
In addition, the letter describes an operator’s obligations if it provides reports on a nationwide basis, such as providing a consumer with a free copy of his or her report annually, upon request. The letter also details an operator’s obligations to landlords using the reports, as well as to the sources of the information for the reports.
While telling the operators it has not yet determined whether they are violating the FCRA, the FTC reserves its right to take action against them based on past or future law violations. The FTC further warns that the operators’ practices could also be subject to laws enforced by other federal, state, or local authorities.
Although the FTC's warnings were directed at the providers of the rental histories, the FCRA also imposes obligations on landlords who use such histories or report information about their rental experiences with tenants to providers of such histories. For that reason, landlords should review their own use of rental histories and reporting procedures for FCRA compliance.