Compliance with Fair Credit Reporting Act (FCRA) Requirements

Situation:

The Fair Credit Reporting Act (FCRA) was enacted in 1970 to promote accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs) and provided to businesses, including credit card companies, banks, employers, landlords, and others. The FCRA provides important protections for credit reports, consumer investigatory reports, and employment background checks. The Act's primary protection requires that CRAs follow "reasonable procedures" to protect the confidentiality, accuracy, and relevance of credit information. To do so, the FCRA establishes a framework of Fair Information Practices for personal information that include rights of data quality (right to access and correct), data security, use limitations, requirements for data destruction, notice, user participation (consent), and accountability.

Under the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which amended the FCRA, consumers may request a free annual credit report from each of the three major CRAs. National specialty credit reporting agencies such as landlords, insurance agencies, and employment agencies will also be required to provide one free annual credit report upon request.

Since landlords regularly perform credit checks on potential tenants, they must adhere to FCRA requirements. The FCRA requires landlords who deny a lease based on information in the applicant's consumer report to provide the applicant with an "adverse action notice." Landlords who fail to provide required disclosure notices face legal consequences since the FCRA allows individuals to sue landlords for damages in federal court. The law also allows individuals to seek punitive damages for deliberate violations of the FCRA. In addition, the Federal Trade Commission (FTC) and other federal and state agencies may sue landlords for non-compliance.

It can be a challenge for large rental property companies with geographically dispersed offices to validate FCRA compliance in each location in order to avoid legal and punitive consequences.

Solution:

Global Compliance provides on-site validation services to assist landlords and property rental companies validate their Tenant Screening processes to ensure compliance with Fair Credit Reporting Act (FCRA) requirements. Through an extensive network of trained auditors stationed across the country, we conduct on-site evaluations of office locations to verify that each location is following FCRA requirements. We can also provide mystery shopping services to covertly validate whether landlords and property managers are adhering to FCRA requirements and company policies specific to tenant screening. Global Compliance also provides on-line training programs to educate employees on FCRA requirements and procedures for compliance.

Outcome:

Landlords and property rental companies ensure all branch offices are compliant with FCRA regulations related to tenant screening in order to avoid legal and punitive consequences.