This week, the FTC published their annual “highlights”. These highlights showcase what the FTC has been doing for the past year to protect American consumers. Here is some of what constitutes a government regulatory agency’s “highlight”:
- In excess of $741 million in redress & disgorgement fees
- Over $63 million civil penalties and
- More than 100 actions filed
This is not a comprehensive list (they also had new rule makings, obtained orders and filed new reports) and these were not all in the real estate or multifamily housing industry (Google was responsible for $22.5 million of the civil fines), however it does indicate that they are working hard to fulfill their obligations to protect America’s consumers financially and securely.
Although it may seem basic to point out the FTC’s definition of a consumer reporting agency as an individual or business entity “who assembles or evaluates information on individuals’ rental histories and provides this information to landlords so that they can screen tenants”, basics may be in order. In April, six companies were sent letters notifying them of this definition and essentially warning them that they must adhere to the Fair Credit Reporting Act (FCRA). These companies were not accessing consumer credit reports, so they may have thought they did not need to have a permissible purpose, ensure data accuracy or send adverse action notices.
To their dismay, “Credit reports” may be a piece of a “consumer report”. Rental history, eviction history, criminal background history and employment history are other slices of the consumer report pie. As such, the consumer has rights to know about, see and dispute the “ingredients” and the FTC made sure they knew it.
Non-compliance with the FCRA, intentional or not, can be very expensive. Individuals can sue landlords for actual damages, court costs and legal fees in addition to punitive damages for deliberate violation of the FCRA. Then, there are the state and federal agencies including the FTC who may get involved to levy civil penalties.
To protect yourself and your business, know your responsibilities to your applicants. You can review the FCRA here: http://www.ftc.gov/os/statutes/031224fcra.pdf . You do not need to be an attorney to understand the obligations, nor do you need to apply for an apartment to be a consumer protected by the Federal Trade Commission. We are all consumers at some point and we should all be grateful for the work of regulatory agencies like the FTC.
For more information on the FTC visit their website: http://www.ftc.gov/os/highlights/2013/index.shtml