Need to Know!

Categories for Tenant Screening

March 18, 2015 12:01 am

Accuracy of Consumer Reporting…What’s the Fuss?!

The Fair Credit Reporting Act (FCRA) has long required that Consumer Reporting Agencies (CRA’s) and “furnishers” of consumer data exercise care in collecting, storing, and reselling consumer data. Section 607. Compliance procedures [15 U.S.C. § 1681e] (b) Accuracy of report.—Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. Section 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i] (a)(1)(A) In general.— Subject to subsection (f), if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly or indirectly through a reseller of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current... View Article

February 3, 2015 12:01 am

Tenant Screening & Management System Integration

Integrations are inherently appealing – promising to reduce or eliminate duplicate data entry, improve accuracy and control.  Integrating a tenant screening solution with a property management system is no exception. The benefit associated with an integration depends on several factors, however. The type of report – Quick v. Comprehensive; The information required to initiate a (tenant screening) report; The management system itself – types of data accommodated and availability via the integration; and Whether there are alternatives to data entry by site staff. Integrations can be expensive to deploy – in time and in treasure.  So it is important to assess the true benefit.  A good place to start is to compare the data entry burden with and without the integration – the results of which are often surprising. Report Types “Quick Reports” require very little data to initiate – typically name, address, date of birth and SSN – data... View Article

January 13, 2015 5:42 pm

Portable Tenant Screening Reports – A Legislative Solution?

Year after year tenant advocates in the State of Washington push for a change to the RLTA that would require landlords to accept portable tenant screening reports OR not charge to run their own – to reduce the burden of multiple screening fees on low income applicants. Landlords argue that it is unfair to require them to accept reports that do not meet their specific requirements – that do not contain the required data (“elements”), that are compiled using substandard tools and processes (“methodology”), or that do not apply their specific “criteria” (to formulate recommendations). Advocates counter by attempting to define a “comprehensive report” – a report that, in theory, will satisfy the requirements of the majority of landlords.  Sounds good, but as with all things the devil is in the detail. Elements It is possible to define a tenant screening report that includes all the elements required by the... View Article

December 12, 2014 10:25 pm

FCRA Accuracy Requirement & Instant Tenant & Employee Screening Reports

Tenant screening reports typically include a consumer credit report from one of the three major credit bureaus, a civil (eviction) records search and a criminal records search. More comprehensive tenant screening reports may include employment verifications, rental references and  a recommendation based on the landlord’s rental criteria. Tenant screening companies are specialized “Consumer Reporting Agencies” (CRA’s) – as defined (and regulated) by the Fair Credit Reporting Act [15 U.S.C. § 1681e] – commonly referred to as the FCRA. Section 607(b) of the FCRA requires that… “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” The Consumer Financial Protection Bureau is tasked with enforcement of the FCRA. Much of the focus is on accuracy, of course, since the CFPB recognizes (as Congress did when crafting the FCRA) that the banking system and,... View Article

November 24, 2014 7:33 pm

Use of Eviction Filings for Tenant Screening – A Growing Dilemma

Eviction records search results are an important part of the tenant screening process – since they are “generally” triggered by the tenant’s failure to fulfill the terms of their rental agreement. Failure to pay rent (or pay rent on time) is perhaps the most common reason for an eviction filing.  But violating other provision of the lease may result in an eviction as well. The majority of evictions are settled (dismissed) by the plaintiff (landlord), however, when the defendant (resident) pays or moves out – since the cost (in time and treasure) associated with pursuing the case to judgment is high and the odds of recovery is low.  But here is the rub.  The court record tells us that a filing was dismissed – but not why it was dismissed.   It is possible, therefore, that the case was thrown out by the judge  due to lack of merit or a... View Article

November 21, 2014 10:28 pm

Avoid Unintentional (Disparate Impact) Discrimination – It is Good Business!!!

Introduction There is often a visceral reaction by landlords and employers to legislation or regulatory activity that would limit use of credit and public records data for tenant and employee screening purposes – even when there is little evidence that doing so is effective.   Limits these days are often associated with the disparate impact legal theory. Under this theory, a business practice that has a disproportionate (and negative) impact on protected individuals can form the basis of a (housing or employment) discrimination claim.  The defense against such claims is “business necessity”, but only when there is no practical alternative – no way to accomplish the same thing without (as HUD calls it) a discriminatory effect. Analysis Assume for the sake of argument, that the courts or regulators are right in entertaining certain claims based on the disparate impact theory – that there is no correlation between use of certain information and... View Article

October 28, 2014 4:19 pm

Tenant Screening & Limits on Use of the Death Master File (DMF)

The Bipartisan Budget Act (Act) of 2013 imposed strict limits on access to (and use of) data from the “Death Master File” (DMF).  The DMF is “…information on the name, social security account number, date of birth, and date of death of deceased individuals maintained by the Commissioner of Social Security….”. DMF data is accessed and reported by the national credit bureaus, and is used extensively as a fraud prevention tool. The limit on access to the DMF was added to the Act at the urging of the administration to combat a growing form of tax fraud – use of the personal information of deceased individuals to generate phony tax returns and refund requests.  Section 203 of the Act prohibits the Commerce Department from granting access to the DMF within three calendar years of an individual’s death unless the recipient is first “certified” under Section 203 (b) of the Act. ... View Article

September 23, 2014 11:48 pm

The Future of Tenant Screening –® Update

On October 1, 2009, Moco Incorporated introduced the industry’s first comprehensive direct-to-consumer tenant screening product under the® (MSR) brand. On October 13, 2014 – almost exactly five years after the initial launch – Moco will introduce the second generation of this innovative product – incorporating Experian’s ConnectSM technology, making MSR a hybrid direct-to-consumer and traditional tenant screening product.  The tenant screening transaction can now be initiated by either the landlord or consumer. End-users (landlords) are now electronically credentialed – to confirm that they are who they say they are and that they have permissible purpose to access consumer reports (including tenant screening reports) in full compliance with Section 607 of the Fair Credit Reporting Act.  The process offers the dual benefit of protecting applicants against unauthorized access to their information and leaving no question as to the authenticity of the report.® (MSR) is a fully transparent, legally compliant... View Article

September 16, 2014 11:11 pm

Portable Tenant Screening Reports – Growing Appeal

Year after year and in state after state, low-income housing advocates push legislation that would require landlords to accept so-called “portable” tenant screening reports (often referred to as a “portability mandate”).  The argument (which has a number of holes) goes something like this: 1. Low-income and other hard to place individuals are often faced with paying multiple tenant screening (or application) fees before finding a landlord who will accept them – only to find they no longer have the funds to cover the security deposit. 2. Tenant screening reports are all the same – contain the same elements (credit, criminal records, etc.) and are equal in quality. What exactly is a portable tenant screening report and how might it reduce the burden on low income and other hard to place individuals?  Simply stated, portable tenant screening reports are reports that can be “shared” with multiple landlords – in a way that assures... View Article

August 14, 2014 5:20 pm

Tenant Screening – Efforts to Limit Public Access to Eviction Records!!

There was, is and will always be… a struggle between those who believe strongly in the importance of unfettered access to the public record and those who would limit access in pursuit of specific (often laudable) goals.  A recent Washington Supreme Court opinion (filed on July 24, 2014) – Hundtofte v Encarnacion – is a case in point. The facts of the case are pretty straight forward.  One month into the lease, the apartments were sold and the new owner wanted Encarnacion to switch to a month-to-month lease.  Encarnacion refused.  Hundtofte (the landlord) filed an unlawful detainer action against Encarnacion – even though there was a valid lease and Encarnacion had done nothing to warrant an eviction. The case settled and the family moved out in return for three months rent and the promise of a favorable reference.  But when they applied for a new apartment, the tenant screening company... View Article