RentGrow to Pay $2.25 Million Over Tenant Screening Reports That Allegedly Multiplied Criminal & Eviction Records

Key Takeaways

• $2.25 Million Penalty: RentGrow will pay $2.25 million to settle federal allegations that it violated the Fair Credit Reporting Act and the FTC Act.
• Duplicate Records: The FTC alleged that RentGrow’s reports sometimes displayed the same criminal or eviction proceeding multiple times, making applicants appear to have more extensive records than they did.
• Incomplete Source Disclosures: RentGrow allegedly failed to identify all sources used to compile its reports, including LexisNexis Accurint data used to match records to consumers.
• Dispute Handling Failures: The company allegedly labeled certain consumer disputes “invalid” without taking the additional steps required under the Fair Credit Reporting Act.
• Misleading Notifications: Regulators alleged that RentGrow told some consumers their successful disputes had been reported to property managers while telling those property managers that nothing had changed.

Deep Dive

RentGrow will pay $2.25 million to settle federal allegations that its tenant screening reports included duplicate criminal and eviction records, potentially making some applicants appear to have more extensive histories than they did, the Federal Trade Commission announced Wednesday.

The complaint, filed by the Justice Department following a referral from the FTC, describes failures across the life of a consumer report, such as how information was assembled, how its sources were disclosed, what happened when a consumer challenged it and what landlords were told after a successful dispute. A proposed order filed with the complaint would require RentGrow to change those practices and prohibit the company from making similar misrepresentations in the future.

RentGrow compiles information from several sources and sells the resulting tenant screening reports to landlords and property managers. That work makes it a consumer reporting agency under the Fair Credit Reporting Act, which requires such companies to maintain reasonable procedures designed to assure the maximum possible accuracy of their reports.

According to the complaint, RentGrow fell short of that standard by failing to prevent duplicate entries for the same criminal or eviction proceeding. The result was not simply a cluttered report. Repetition changed the apparent meaning of the information, making some applicants look as though they had accumulated more criminal convictions or faced eviction more often than they had.

In some instances, the underlying vendor data was accurate. The distortion occurred when RentGrow displayed it, presenting a single proceeding in multiple entries. The FTC alleged that the company knew about the problem but did not introduce reasonable procedures to address it until the agency began its investigation.

“Inaccurate background reports can have a real impact on people by affecting their ability to obtain housing or a job,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in announcing the settlement. “Companies that provide background reports have a responsibility under the law to take reasonable steps to ensure the accuracy of those reports and to comply with other requirements of the FCRA.”

That responsibility reaches beyond the information printed on the page. Consumers are entitled to know where the information came from, particularly when they believe it is wrong. The complaint alleged that RentGrow did not always provide a complete account.

Regulators pointed to LexisNexis Accurint, which RentGrow allegedly used to obtain additional historical addresses and middle names for certain consumers. Those details could then be used to match criminal and eviction records to an applicant. Yet when consumers requested the information and sources behind their reports, RentGrow did not disclose Accurint’s role, according to the complaint.

The omission mattered because a dispute is only as useful as the consumer’s ability to find the error. A person shown an unfamiliar criminal record needs to know whether the mistake began with a court file, a name variation, an old address or the process used to join those pieces together. Without the full chain of information, the consumer is left to argue with a conclusion whose origins remain out of view.

When a Correction Did Not Travel

The complaint portrays the dispute process as another point of failure. When consumers challenge the completeness or accuracy of a report, the Fair Credit Reporting Act requires consumer reporting agencies to follow specific procedures for resolving the dispute. The FTC alleged that RentGrow instead classified some disputes as “invalid” and went no further.

Those disputes included challenges involving duplicate records, as well as cases in which the underlying record had changed after the original tenant screening report was prepared. A later development does not necessarily mean the earlier report was inaccurate when issued. It does, however, present a dispute that must be handled according to the law. The government alleged that RentGrow could not simply apply a label and abandon the inquiry.

The most troubling allegation concerns what happened after some consumers successfully corrected their reports. According to the complaint, RentGrow told those consumers that the property manager had been notified that disputed information was modified or deleted. The company allegedly gave the property owner a different account, saying there had been no change.

For the consumer, that difference could be decisive. A corrected file has little value if the person making the housing decision continues to rely on the old one, particularly when the applicant has been assured that the correction reached its destination.

That alleged conduct forms the basis of the FTC Act claim. Under the proposed order, RentGrow would be prohibited from misrepresenting whether it provides updated screening reports to landlords and property managers following a successful consumer dispute.

The order would also bar the company from failing to maintain reasonable procedures designed to ensure the maximum possible accuracy of its reports, including measures intended to prevent multiple records from appearing for the same criminal or eviction proceeding. RentGrow would remain subject to the Fair Credit Reporting Act’s requirements governing source disclosures and consumer disputes.

Background screening operates at a peculiar distance from the life it describes. Names, addresses and court records arrive as data, are matched and arranged, then delivered to someone with the power to say yes or no. The complaint against RentGrow is a reminder that errors do not need to be dramatic to become consequential. A duplicated line, an undisclosed source or a correction sent nowhere can be enough to turn a record into a verdict.

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