Tech Firm to Pay $3M Over Poor Tenant Screenings

October 19, 2018

RealPage Inc., a technology provider to the real estate industry, agreed this week to pay $3 million to settle allegations that its tenant screening reports were flawed over a five-year period.

Tech firm lawsuit

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The Federal Trade Commission accused RealPage of failing to “take reasonable steps to ensure the accuracy of tenant screening information that it provided to landlords and property managers” from January 2012 through September 2017. Some potential renters may have been denied housing due to the erroneous reports, the FTC alleges. “You shouldn’t get turned down for an apartment because someone has the wrong information about you,” says 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.”

RealPage has denied wrongdoing. Company officials say they settled the dispute to avoid the cost and distraction of fighting the charges, HousingWire reports.

FTC alleges that RealPage’s screenings may have shown incorrect criminal records of prospective tenants. The screening reports are generated using the applicant’s first name, middle name (when available), last name, and date of birth when searching for criminal records. However, the FTC alleges that the RealPage system only required a match of the applicant’s last name and not an exact match of first name, middle name, or date of birth. As such, FTC says a screening on someone named “Anthony Jones” who was born on April 15, 1969 could find a criminal record for people with names like Antony Jones, Antonio Jones, Antoinette Jones on the same birth date.

“The FTC’s investigation centered on certain ‘soft’ matching practices for consumers with common last names,” RealPage said in a statement. RealPage officials say that it’s an issue that impacts the entire screening industry. “The FTC was unable to identify any prior industry or regulatory guidance or other clear legal precedent that RealPage should have followed,” RealPage continued in its statement. “We are disappointed that the FTC singled out RealPage for an issue that has confronted the entire screening industry, namely how to match applicants with common last names to public records when most courts do not make social security or driver’s license numbers available as part of those records.”