Automated background checks freezing out reliable renters
Burglary and domestic assault in Minnesota. Selling meth and jumping bail in Kentucky. Driving without insurance in Arkansas. Disorderly conduct. Theft. Lying to a police officer. Unspecified “crimes.” Too many narcotics charges to count.
That’s what the landlord for an apartment in St. Helens, Ore., saw when he ran a background check for Samantha Johnson, a prospective tenant, in 2018.
But none of the charges were hers.
The growing data economy and the rise of American rentership since the 2008 financial crisis have fueled a rapid expansion of the tenant-screening industry, now valued at $1 billion. The companies produce cheap and fast — but not necessarily accurate — reports for an estimated 9 out of 10 landlords across the country.
The automated background check for Johnson cast a wide net, looking for negative information from criminal databases even in states where she had never lived and pulling in records for women whose middle names, races and dates of birth didn’t match her own. It combined criminal records from five other women: four Samantha Johnsons and a woman who had used the name as an alias, even though the screening report said she was an “active inmate” in a Kentucky jail at the time.
“You can totally tell we’re not the same person at all,” said John
son, who eventually got the apartment after she convinced the landlord she wasn’t a criminal.
It was not the first time she had been the victim of incorrect automated screening reports. It wouldn’t be the last, either.
False reports of crime, with no human review
The reports can be created in a few seconds, using searches based on partial names or incomplete dates of birth. Tenants generally have no choice but to submit to the screenings and typically pay an application fee for the privilege. Automated reports are usually delivered to landlords without a human ever glancing at the results to see if they contain obvious mistakes, according to court records and interviews.
A review of hundreds of federal lawsuits filed against screening companies over the past 10 years shows how hasty matches can lead to reports that wrongly label people deadbeats, criminals or sex offenders. Among those who say they were wrongly maligned:
• Davone Jackson, who was denied low-income housing in Tennessee after the screening company Realpage reported that he had twice been convicted of trafficking in heroin in Kentucky and was on Wisconsin’s sex offender registry. In fact, those records belonged to an Eric Jackson and a James Jackson. After the denial, Davone Jackson said, he and his 9year-old daughter were forced to live in a small motel room for nearly a year.
• Glenn Patrick Thompson Sr. and Glenn Patrick Thompson Jr., who said they had been left homeless near Seattle after a tenantscreening company called Onsite, which is now part of Realpage, told two landlords that the father and son had been previously evicted. In fact, the eviction was for a Patricia Thompson, who was not related to them.
• William Hall, who lost out on a duplex in his small town in Georgia after Transunion Rental Screening Solutions said he had sexually abused a minor. The criminal record belonged to a William Hall who was 30 years older and possibly dead. Hall said the landlord had stopped returning his telephone calls after receiving the incorrect report.
Hall’s suit is pending; the others were settled for undisclosed sums.
The screening process happens so quickly and the competition for apartments can be so fierce that prospective renters don’t always know why they were turned down, much less whether an incorrect report was the cause.
Some screening companies don’t even provide the underlying records to landlords, instead producing a color-coded “risk” score or a thumbs-up or thumbs-down lease recommendation.
Screening-company employees have stated in lawsuits that they err on the side of including any possible match rather than excluding possible errors. The owner of one screening company criticized his industry, saying his peers can do better.
“We can figure out how to match a record,” said Matt Visser, chief executive of Victig Screening Solutions, whose Utah company sells 10,000 to 20,000 tenant and employment screening reports a month. He said his company verified negative findings. “It requires a human element,” he said.
“When we are performing any of these reports, it is a fairly monumental moment in someone’s life,” he added. “You just have to give a crap.”
Large background firms, including Realpage, Corelogic and Transunion, declined interview requests for this article. They referred specific questions to a trade group, the Consumer Data Industry Association.
Noting the millions of tenant background reports produced each year, the group denied that any systemic problems existed and accused consumer lawyers of being myopic.
“If I sat in a cardiologist’s office all day, all I would see is people with heart problems,” said Eric Ellman, the association’s senior vice president for public policy and legal affairs. He acknowledged that it hadn’t developed any standards for screening accuracy but said the companies had their own policies.
In responses to lawsuits, tenant-screening companies say renters dispute fewer than 1% of reports. But it’s impossible to know the actual error rate because tenants may not always know to complain.
With about half the nation’s 43 million rentals turning over every year, even an error rate of 1% could upend the lives of hundreds of thousands of people.
Regulators have taken action against a few companies for slipshod tenant screenings; the Fair Credit Reporting Act requires background screeners to “follow reasonable procedures to assure maximum possible accuracy.” But rejected tenants continue to complain about the same careless practices by companies that regulators had called out, interviews and federal lawsuits show.
Lax rules and wild cards
Tenant screening was once confined to a simple credit check with the three major credit bureaus and a few phone calls to references, but it was revolutionized by the advent of cheap or even free, easily available electronic court records. These include criminal records from across the country, sex-offender registries, terrorism watch lists and housing court records.
Easy access to the troves of data has also made it possible for anyone with a computer to become a background screener: About 2,000 companies offer the service, but that’s only an estimate. Tenant screeners don’t have to register with any government agency.
People can complain about faulty background reports to the Federal Trade Commission or the Consumer Financial Protection Bureau — or sue. But regulators have not limited tenant screening as much as other kinds of background checks.
Regulators forced credit bureaus to follow standards for matching records to a person, and the kinds of records the bureaus can legally report are limited. Rules for employment screening, which some of the tenant-screening firms provide, require employers to share the negative report with a rejected applicant.
None of those restrictions applies to tenant screening.
Federal law requires landlords only to tell tenants if they were turned down because of a negative report and who produced it. Under the Fair Credit Reporting Act, screening companies have 30 days to respond to tenants’ requests for corrections. By then, a landlord may have given the apartment away.
A handful of cities have begun to regulate tenant screening by limiting a landlord’s ability to reject an applicant for old criminal convictions or evictions.
Courts have also begun to take notice; a panel of federal judges recently consolidated seven lawsuits about errors in Transunion’s tenant-screening reports.
Screening companies put the onus for accuracy on landlords, telling them right in the reports that they should double-check them.
Steven Schachtman, a longtime Minneapolis landlord and property manager who oversees about 10,000 rentals and uses screening firms, said it was difficult for a landlord to check the reports to ensure they matched their applicants.
“That is why we are hiring them,” he said. “I assume they have matched everything up.”
A common method that screening companies use to increase hits, court records show, is a socalled wild-card search, which gathers different names that start with the same few letters.
Terrence Enright’s experience, described in his federal lawsuit against National Tenant Network, shows how it works. When he applied for an apartment in Chicago in 2014, the company searched for “Enright, Ter*” and “Terrence, Enr*.” But the company also searched for misspelled versions, including “Enwright, Ter*,” and found a match: an eviction for a Teri Enwright in California, one of what Enright said were three evictions mistakenly attributed to him, which resulted in his being denied the apartment.
Screening companies could use more careful methods to reduce incorrect reports, such as excluding eviction records for addresses that don’t appear on a person’s credit report or reporting only records that match full names and other data, such as complete dates of birth.
But they often don’t, tenants and consumer attorneys say, and the errors can have an outsize effect on people with common names — particularly members of minority groups, which tend to have fewer unique last names. For example, more than 12 million Latinos nationwide share just 26 surnames, according to the census.