RentGrow Inc. must pay a $2.25 million civil penalty under a stipulated federal court order resolving a Justice Department case that was investigated and referred by the Federal Trade Commission (FTC).
RentGrow’s tenant screening practices are at the centre of the case, which concerns reports supplied to landlords and property managers when assessing rental applicants. The company was accused of violating the Fair Credit Reporting Act (FCRA) and the FTC Act, with the federal court order imposing a $2.25 million civil penalty and an injunction.
In a complaint filed in the U.S. District Court for the District of Columbia, the government alleged that RentGrow failed to maintain reasonable procedures designed to ensure maximum possible accuracy in the information contained in its tenant screening reports. It also alleged that the company failed to disclose, when requested by consumers, the information held in their reports and the sources of that information.
The complaint further alleged failures in the procedures applied when consumers disputed the accuracy of a report. Those allegations were brought under FCRA. Separately, the government alleged that RentGrow violated the FTC Act’s prohibition on deceptive business practices by misrepresenting to tenant applicants that, after a successful dispute, corrections to or removals of inaccurate information were reported to landlords and property managers.
The stipulated order requires RentGrow to pay the $2.25 million civil penalty and prohibits the alleged misconduct. It also requires related compliance reporting, monitoring and recordkeeping. The operational effect is to place report accuracy, consumer disclosure, dispute handling and communications about corrected information within the requirements imposed by the court order.
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division said tenant screening reports can significantly affect housing applications and emphasised the importance of accurate information, transparent reporting and a meaningful opportunity for consumers to address information that may affect them.
He also stated that the Justice Department is committed to ensuring companies collecting and providing consumer information comply with the law and maintain practices supporting fair and informed housing decisions.
The United States is represented in the action by Assistant Director Zachary A. Dietert and Trial Attorney Jordan A. Ryan from the Enforcement Section of the Civil Division’s Enforcement and Affirmative Litigation Branch. Whitney Moore, Jamie Hine and Kamay Lafalaise represent the FTC.
The order therefore extends beyond the $2.25 million payment, with RentGrow also subject to an injunction and ongoing regulatory compliance reporting, monitoring and recordkeeping requirements.
