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FTC Imposes Largest Fine for a Background Check Provider After FCRA Violations

By Michael Klazema on 11/8/2018

Background checks are a useful tool not only for employers but for many other professionals as well, such as landlords who want to screen potential tenants before offering a lease agreement. Those who rely on the background checks they order to make decisions must be able to trust the results they receive. Not only do landlords want to avoid potential liability in the event an applicant alleges discrimination, but inaccurate results could also result in missing an opportunity to work with a reliable tenant. Federal standards, such as the Fair Credit Reporting Act, stipulate providers must take care to ensure accurate results.

Lack of accuracy is precisely why a tenant screening company based in Texas, RealPage, recently agreed to a $3 million civil penalty for violations of the FCRA. According to the FTC, RealPage not only employed a process that inherently often led to inaccurate results but also did not have in-house procedures for quality control. The result was that numerous applicants for rental properties owned by RealPage clients were potentially associated falsely with other individuals with criminal records.

RealPage used only basic search parameters based on full name and date of birth and did little to cull the subsequent results of inaccurate entries. The primary FCRA violations the FTC alleges occurred when RealPage's records search returned names which constituted only a partial match to the subject undergoing a background check. In the FTC's example, a search for someone named "Anthony Jones" might also return results such as "Antony" and "Antoinette Jones" as matching records. The potential for mistaken identity and incorrectly-correlated records was sky-high.

As part of its restitution, RealPage will not only pay the FTC's most expensive penalty for a background check provider ever but also move to implement procedures that will bring the company into full compliance with the FCRA. This includes frequent FTC-led reviews of the company's efforts to improve its process. These actions make one thing very clear: the government takes its responsibility to protect consumers from inaccurate results that can have a negative impact on their lives seriously.

The FCRA aims to protect both consumers and businesses that order background checks. When looking into something as serious as an applicant's criminal history, the answers received can be essential in reaching a conclusion. RealPage was alleged to have used the improper procedures for five years, putting the integrity of many of its clients' efforts in peril. 

At backgroundchecks.com, all the reports we provide are fully FCRA compliant, from our comprehensive US OneSEARCH to our national offender registry search. When making important decisions about hiring, renting, or loaning to an individual, dependable results from a reliable source are an invaluable asset.


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