FTC warns tenant-check websites

The agency sent a letter to the owners of six websites – including one called BadTenantListings.com – to give them a stern warning about complying with the law.

“At this time, we have not evaluated your company’s practices to determine if they are in compliance with the FCRA. However, we encourage you to review your websites and your policies and procedures for compliance,” the letter, signed by Maneesha Mithal, the FTC’s associate director of the Division of Privacy and Identity Protection.

The BlueChip Group, M & R Rental Properties, The Landlord Protection Agency, National Tenant Network, 123 Rent Inc. and Tenancy Bureau received notices from the FTC last month.

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The Landlord Protection Agency, which features a “deadbeat database,” has a disclaimer high on the site saying that it complies with all FCRA regulations.

If the information these sites are providing is used to judge potential tenants, the FTC considers the companies to be credit-ratings agencies and has strict regulations surrounding the so-called consumer reports – including oversight to ensure the information is not being used for illegal purposes, such as spying or marketing.

The companies must also provide consumers with a free report annually, upon their request. If a tenant is denied because of a negative report, the landlord must notify the applicant about the site and include a way to obtain his or her report.

Rather than merely setting up a database for complaints, the regulator warns, the company must be ready to investigate claims against a person to judge their veracity.