RentGrow to Pay $2.25 Million to Settle FTC Allegations the Company Violated the Fair Credit Reporting Act and FTC Act

RentGrow, a provider of consumer reports for tenant screening, will be required to pay $2.25 million to settle Federal Trade Commission allegations that the company violated the Fair Credit Reporting Act (FCRA), including by failing to use reasonable procedures to ensure the accuracy of its reports, and the FTC Act.

The FCRA requires consumer reporting agencies (CRAs) to maintain reasonable procedures to assure the maximum possible accuracy of the information they include in background screening reports, disclose the sources of information used to compile a background screening report when a consumer requests it and take certain steps when a consumer disputes the completeness or accuracy of information in their background screening report.

A complaint, filed by the Department of Justice upon notification and referral from the FTC, alleged that Massachusetts-based RentGrow Inc. is a CRA since it compiles information it obtains from a variety of sources into background screening reports that it sells to landlords and property managers as tenant screening reports. As a CRA, RentGrow is therefore subject to the requirements of the FCRA, and the complaint alleged that RentGrow failed to comply with the FCRA. The complaint also alleged that RentGrow violated the FTC Act by misleading consumers about the outcomes of their disputes.

“Inaccurate background reports can have a real impact on people by affecting their ability to obtain housing or a job,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “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.”

The complaint alleged that RentGrow violated the FCRA in several ways by: