Credit report agency TransUnion has been accused of failing to take steps to ensure the accuracy of rental background checks that landlords use to decide who gets housing. The company is also accused of withholding from renters the names of third parties that provided the inaccurate information.
The Consumer Financial Protection Bureau and the Federal Trade Commission requested a federal court to order TransUnion to pay $15 million for its violations of the Fair Credit Reporting Act. The agencies hope TransUnion will make significant improvements to how it reports evictions.
“Consumers or renters, they don’t have a lot of power in that relationship. The customers of those reports are really the landlords, and the landlords usually don’t know if the information being reported by potential tenants is accurate,” said Richa Dasgupta, a CFPB deputy enforcement director for litigation.
Dasgupta added that the reporting agency failed to properly process background checks, resulting in renters not getting housing and landlords not getting tenants.
“Sometimes those type of things fall by the wayside when companies are looking at their bottom line,” Dasgupta said.
TransUnion released this statement to WTOP:
“TransUnion’s rental screening services provide access to valuable insights and data sourced from public, private, credit and court records used to evaluate potential and current tenants. Over the past year, we have worked with the CFPB and FTC to enhance our rental screening reporting practices, including making certain changes to how eviction records are reported. We believe these changes will soon become industry standard. This settlement reflects the agencies’ evolving regulatory objectives and our openness to join them in reasonable initiatives that are beneficial to consumers and support safe, affordable housing.”
The CFPB has also ordered TransUnion to pay $8 million, saying TransUnion lied to consumers about placing or removing security freezes and locks on the credit reports of tens of thousands of consumers in a timely manner.
CFPB said TransUnion told consumers the requests were completed, but the requests were actually dumped into its yearslong backlog.
As TransUnion and the rest of the industry implement changes, the CFPB wants consumers to stay vigilant and report credit problems to the bureau.
“When we see harm to consumers that violates the law, we’re going to take action,” Dasgupta said.
