When Your Tenant Screening Report is Wrong

Protections against evictions due the COVID-19 epidemic are expiring.  This is making tenants leave their current homes and search for new apartments. Flawed tenant screenings (or background checks) are creating havoc for would-be tenants, and there is no watch guard coming to the rescue.

Faulty background checks make the hunt for a place to rent more complicated and competitive than ever in tight rental markets. Potential tenants can be rejected due to incorrect criminal reports and not even notified of the reason for rejection. If and when a tenant discovers the mistake, the rental unit is long gone.

Landlords rely heavily on tenant screening

The tenant screening industry blossomed in the 2008 financial crisis to serve landlords, both small and corporate. Companies like TransUnion serve landlords only and boast, “Get 15% better eviction prediction than a typical credit score.”

But what happens when automated algorithms pull data that is incorrect? According to a May 28, 2020 New York Times article, tenants are often charged fees for reports that are completely erroneous – and sometimes cases of mistaken identity.

The problem stems from data services unable or unwilling to differentiate individuals with similar or common names like “Jones” or “Smith.” Outcomes of bad reports are particularly severe for minority groups with few unique last names, such as Latinos, who share just 26 surnames.

Be alert to potential unforeseen or incorrect issues with your background report

Although federal regulators are aware and slowly taking action on the sloppy, harmful tenant screening used by companies, progress is slow. Renters who might have secured an apartment can end up homeless, or perpetually couch surfing.  Individuals seeking subsidized housing are particularly vulnerable – often waiting years on lists only to be rejected for a faulty report.

What is a tenant’s defense against a bad background check? First, request the source of the report and start a dispute process.  Be aware the tenant screening industry operates under few restrictions. The Fair Credit Reporting Act requires screening companies make corrections within 30 days. Unlike obtaining “pre-approval” documentation for a home mortgage, renters have no access to “pre-approval” of tenant screening documentation.

A bright spot?

The onus for accuracy in a tenant screening report is on the landlord. If you are impacted by denial of access to a rental property due to an erroneous report, it is possible to dispute the rejection and demand correction of the report. Contact a tenant rights attorney if a bad screening report is holding you back.

Know your rights. Protect yourself.