Earlier this week, the Federal Trade Commision issued new guidance to companies and individuals who screen potential tenants to help them comply with the FCRA.
What Landlords Need to Know
- There are necessary steps to take before getting a consumer report, and after taking any type of adverse action based on the results of the report.
- Before requesting a consumer report, you must certify to the company providing the report that the report is solely going to be used for housing purposes.
- If a landlord decides to take adverse action against a tenant or applicant, they must first give notice.
- When sending an adverse action notice, it must include contact information for the company that provided the report, as well as an explanation of the applicant or tenant’s right to dispute the report.
What Background Screening Companies Need to Keep in Mind
- According to Lisa Weintraub Schifferle who reported on the recent changes in guidance, reports a background screening company are covered by the FCRA ” if they’re used to decide eligibility for housing and include information ‘bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.’ “
- If the tenant screening company is covered by the FCRA, it has several main requirements:
- Follow procedures and be accurate.
- Provide clients with information about the FCRA.
- Most importantly, honor the rights of tenants and applicants.
To see the FTC’s guide for tenants on complying with the FCRA when using consumer reports, visit this link.