RentGrow, Inc. has agreed to pay $2.25 million to resolve Federal Trade Commission allegations that its tenant-screening reports violated the Fair Credit Reporting Act (FCRA) and the FTC Act. The proposed consent order, filed in federal court, requires RentGrow to implement improved accuracy procedures and comply with FCRA dispute and disclosure requirements.

The settlement is significant not only for RentGrow but for the entire tenant-screening industry: it signals FTC enforcement priorities in the consumer-reporting space and establishes a compliance benchmark that landlords, property managers, multifamily operators, and screening-platform providers should assess against their own practices.

The FTC's complaint alleged four categories of FCRA violations:

1. Duplicate Criminal and Eviction Records

The FTC alleged that RentGrow's reports contained duplicate criminal records and eviction records — the same underlying event appearing multiple times in a single report, creating the false impression of a more extensive adverse history than actually existed. Duplicate records are a recurring problem in consumer reporting, arising from data aggregation across multiple source databases that may each contain the same underlying record.

Under FCRA Section 607(b), consumer reporting agencies must follow reasonable procedures to assure maximum possible accuracy of the information in consumer reports. The FTC's position is that a system that generates duplicate records does not satisfy this standard.

2. Failure to Disclose All Data Sources

The FTC alleged that RentGrow failed to disclose all sources of the information in its reports when consumers requested their files. FCRA Section 609 requires consumer reporting agencies to disclose, upon consumer request, the sources of information in the consumer's file. The FTC alleged that RentGrow's disclosures were incomplete, preventing consumers from identifying and challenging the original sources of adverse information.

3. Inadequate Dispute Handling

The FTC alleged that RentGrow inadequately handled consumer disputes. Under FCRA Section 611, when a consumer disputes the accuracy or completeness of information in a consumer report, the consumer reporting agency must conduct a reasonable reinvestigation, review all relevant information submitted by the consumer, and delete or modify inaccurate or unverifiable information.

The FTC's complaint alleged that RentGrow's reinvestigation procedures were deficient — failing to adequately investigate disputed information and failing to correct inaccurate records following a consumer dispute.

4. Misrepresentation Regarding Corrected Reports

The FTC alleged that RentGrow misrepresented to consumers whether corrected reports had been communicated to property managers who had received the original inaccurate report. Under FCRA Section 611(d), when a consumer reporting agency corrects information following a dispute, it must notify any person who received the consumer report within the preceding two years of the correction. The FTC alleged that RentGrow failed to provide these notifications and misrepresented its compliance with this obligation.

The proposed consent order requires RentGrow to:

• Pay $2.25 million in civil penalties
• Implement improved accuracy procedures to prevent duplicate records and ensure maximum possible accuracy
• Comply with FCRA disclosure requirements, including full disclosure of data sources upon consumer request
• Implement adequate dispute-handling procedures, including reasonable reinvestigation of disputed information
• Provide corrected-report notifications to property managers who received inaccurate reports
• Submit to FTC monitoring and compliance reporting

Consumer Reporting Agency Obligations

Tenant-screening companies are consumer reporting agencies (CRAs) under the FCRA. As CRAs, they are subject to the full range of FCRA obligations, including:

• Accuracy: Reasonable procedures to assure maximum possible accuracy (Section 607(b))
• Disclosure: Disclosure of file contents and data sources upon consumer request (Section 609)
• Dispute reinvestigation: Reasonable reinvestigation of disputed information (Section 611)
• Corrected-report notification: Notification to report recipients of corrections (Section 611(d))
• Permissible purpose: Furnishing reports only for permissible purposes (Section 604)

Landlord and Property Manager Obligations

Landlords and property managers who use tenant-screening reports are also subject to FCRA obligations as users of consumer reports:

• Adverse action notice: When a landlord takes adverse action (denying a rental application, requiring a co-signer, or charging a higher deposit) based in whole or in part on a consumer report, the landlord must provide the applicant with an adverse action notice identifying the CRA that provided the report and informing the applicant of their right to obtain a free copy of the report and dispute inaccurate information (Section 615)
• Permissible purpose: Landlords may only obtain consumer reports for permissible purposes — evaluating a rental application is a permissible purpose under Section 604(a)(3)(F)
• Disposal: Consumer report information must be properly disposed of when no longer needed (Section 628)

Tenant-Screening Platform Providers

The RentGrow settlement establishes a compliance benchmark for the tenant-screening industry. Screening platforms should:

• Audit their data aggregation processes to identify and eliminate duplicate records
• Review their consumer-disclosure procedures to ensure all data sources are disclosed
• Assess their dispute-handling procedures against the FCRA's reinvestigation requirements
• Implement corrected-report notification procedures for property managers who received inaccurate reports
• Conduct regular accuracy audits of their underlying data sources

Landlords and Property Managers

Landlords and property managers should:

• Audit their tenant-screening vendors against the FCRA compliance standards highlighted by the RentGrow settlement
• Review vendor agreements to include data-accuracy warranties, audit rights, correction obligations, rapid dispute escalation procedures, and indemnification for FCRA violations
• Ensure that adverse-action notice procedures are in place and functioning correctly
• Confirm that vendor agreements clearly allocate responsibility for corrected-report notifications

Multifamily Operators

Large multifamily operators with centralized leasing operations face heightened exposure because the volume of screening reports they obtain increases the statistical likelihood of encountering inaccurate reports and the aggregate penalty exposure from systematic FCRA violations. Multifamily operators should conduct enterprise-wide audits of their screening vendor relationships and adverse-action notice procedures.

PropTech and Screening-Platform Startups

Technology companies building tenant-screening or rental-application platforms should ensure that their products comply with the FCRA from the outset. The RentGrow settlement illustrates that the FTC is actively enforcing FCRA obligations against screening platforms, and that the penalties for systematic violations are substantial.

Turkish real estate investors in the U.S. multifamily market. Turkish investors active in U.S. multifamily real estate — including apartment buildings, student housing, and senior housing — should ensure that their property management operations comply with FCRA tenant-screening requirements. The RentGrow settlement illustrates that the FTC is actively enforcing these requirements, and that landlords who rely on non-compliant screening vendors face legal and reputational risk.

Turkish PropTech companies entering the U.S. market. Turkish technology companies developing rental-application, tenant-screening, or property-management platforms for the U.S. market must build FCRA compliance into their products from the outset. The FCRA's accuracy, disclosure, dispute, and adverse-action requirements are non-negotiable for any platform that generates or uses consumer reports in the U.S. rental market.

Vendor agreement structuring. The RentGrow settlement highlights the importance of vendor agreement terms for landlords and property managers. Turkish investors acquiring U.S. multifamily assets should ensure that their property management agreements and screening-vendor contracts contain appropriate FCRA compliance warranties, audit rights, and indemnification provisions.

ULF New York advises Turkish companies and investors on U.S. consumer protection law, real estate compliance, and market entry into the United States.