According to the Federal Trade Commission (FTC) “Background screening reports are ‘consumer reports’ under the FCRA when they serve as a factor in determining a person’s eligibility for housing, employment, credit, insurance, or other purposes and they include information ‘bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.’” Tenant screening companies that sell or provide background check reports are “consumer reporting agencies” under the FCRA.
Just like other CRAs covered by the FCRA, tenant screening companies must follow reasonable procedures to assure the maximum possible accuracy of the reports they prepare. The FTC notes that “Certain practices may be indicators that a background screening company isn’t following reasonable procedures. For example, if a report lists criminal convictions for people other than the applicant or tenant – for instance, a person with a middle name or date of birth different from the applicant’s – that raises FCRA compliance concerns.”