RentGrow faces $2.25 million penalty, injunction over tenant screening practices in U.S.

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RentGrow penalty & injunction

Highlights

RentGrow Inc. faces a $2.25 million civil penalty judgment and injunction following allegations it violated the Fair Credit Reporting Act and FTC Act.
The federal order imposes compliance reporting, monitoring, and recordkeeping requirements to ensure future adherence to consumer protection laws in tenant screening.
The case signals heightened regulatory and legal scrutiny for consumer reporting firms whose data and procedures directly impact housing access for applicants.

Court order sets compliance terms

As reported by Justice Department, citing the U.S. Department of Justice, a federal court has entered a stipulated order resolving a case against consumer reporting company RentGrow Inc. after an investigation and referral by the Federal Trade Commission. The order imposes a $2.25 million civil penalty judgment and an injunction tied to allegations that the company violated the Fair Credit Reporting Act and the FTC Act in reports used by landlords and property managers to screen rental applicants.

The government alleges in a complaint filed in the U.S. District Court for the District of Columbia that RentGrow fails to maintain reasonable procedures to ensure maximum possible accuracy in its tenant screening reports. It also alleges the company fails to disclose, on request, the information contained in consumers' reports and the sources of that information, and fails to follow required procedures when consumers dispute a report's accuracy.

The complaint further alleges that RentGrow engages in deceptive business practices under the FTC Act by misrepresenting to tenant applicants that successful disputes lead to corrected or removed inaccurate information being reported to landlords and property managers. Under the stipulated order, the company is also subject to compliance reporting, monitoring and recordkeeping requirements designed to prevent similar conduct.

Housing and consumer reporting scrutiny grows

Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division says tenant screening reports can significantly affect the outcome of a housing application and that consumers should be able to expect accurate and transparent information. He adds that consumers should also have a meaningful opportunity to address information that may affect their housing prospects.

The case underscores the regulatory and legal risks facing companies that provide consumer data for rental decisions, a segment where errors can directly affect housing access. The United States is represented in the action by Assistant Director Zachary A. Dietert and Trial Attorney Jordan A. Ryan from the Civil Division's Enforcement and Affirmative Litigation Branch, while Whitney Moore, Jamie Hine and Kamay Lafalaise represent the FTC.

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