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Texas Company Will Pay $3 million to Settle FTC Charges That it Failed to Meet Accuracy Requirements for its Tenant Screening Reports

A Texas company has agreed to pay $3 million to settle Federal Trade Commission charges that the company failed to take reasonable steps to ensure the accuracy of tenant screening information that it provided to landlords and property managers, a violation of federal law that caused some potential renters to be falsely associated with criminal records.

The FTC’s complaint alleges that RealPage, Inc. violated the Fair Credit Reporting Act (FCRA) by failing to take reasonable steps to ensure the accuracy of tenant screening information provided to its clients. The amount RealPage has agreed to pay as part of the settlement is the largest civil penalty the FTC has obtained against a background screening company.

“You shouldn’t get turned down for an apartment because someone has the wrong information about you,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “This case shows that, especially with today’s tight rental market, we will hold tenant screening companies responsible for the accuracy of their reports.”

The FTC alleges that from at least January 2012 until September 2017, RealPage used broad criteria to match applicants to criminal records and only applied limited filters to the results, and did not have policies or procedures in place to assess the accuracy of those results.

RealPage compiled screening reports through an automated system that used the applicant’s first name, middle name when available, last name, and date of birth when searching for criminal records. Its matching criteria only required an exact match of an applicant’s last name along with a non-exact match of a first name, middle name, or date of birth, the FTC alleges. For example, if RealPage searched an applicant named Anthony Jones born on October 15, 1967, it would deem a match if it found a criminal record for Antony Jones 10/15/67, Antonio Jones 10/15/67 and Antoinette Jones 10/15/67.

Because RealPage’s screening reports associated some potential renters with criminal records that did not belong to them, those renters may have been turned down for housing or other opportunities, according to the complaint.

In addition to the civil penalty, the proposed settlement also requires RealPage to maintain reasonable procedures to assure the maximum possible accuracy of the information it includes about individuals in its consumer reports. In addition, RealPage is subject to compliance and reporting requirements.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 5-0. The FTC filed the complaint and final order in the U.S. District Court for the Northern District of Texas, Dallas Division. NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.