Contemporary Information Corp and Policy on Background Check Reports

Contemporary Information Corp (CIC) offers a host of solutions tailored to the needs of rental property owners, including tenant screening and housing court records. Maintaining a strong pulse on the industry, Contemporary Information Corp emphasizes the importance of accurate, measurable ways of determining the suitability of tenants. They look at criminal records, employment history, and past legal actions such as evictions.

In 2023, the Consumer Financial Protection Bureau (CFPB) and The Federal Trade Commission (FTC) took steps toward codifying how data is utilized by consumer reporting companies. They began by seeking input from current and prospective tenants, property managers, landlords, background screening companies, and advocacy groups. Together, they provided detailed insights on an array of housing decision factors.

Specifically, they focused on the way in which landlords and property managers consider criminal and eviction records as part of the application process, and how potential inaccuracies can arise. The agencies also sought to understand how application and screening fees are set and how automated decision-making and algorithms may be applied to the tenant screening process. Another focus was on understanding whether consumers are adequately informed of tenant screening criteria, or notified on the specific information within a background check that resulted in rejection.

After receiving more than 600 comments, primarily from renters, the FTC and CFPB released guidance to consumer reporting companies in early 2024. A key issue uncovered was that renters often reported not receiving adverse action notices, as well as discovering errors and inaccuracies in their housing court records that proved challenging to correct. These could have a long-lasting negative impact on housing opportunities.

The CFPB provided consumer reporting companies with guidance on correcting this through setting in place reasonable procedures for ensuring reports are not false or misleading. Recommended steps include thoroughly checking that no public record information is released that has been “legally restricted from public access” through being sealed or expunged.

In addition, the CFPB stipulates that records of court filings involving criminal charges, arrests, and eviction proceedings within background check reports should include disposition information. This covers the final outcome, indicating how the charge or dispute was resolved or settled. If the settlement was in the applicant’s favor, this should have a significant impact on the decision of whether to accept or reject the rental application.

The advisory opinion also drew attention to the importance of avoiding reporting duplicative information and negative information that is outdated. Each piece of negative information has its own unique reporting period associated with it, depending on when the negative item was introduced in court. As an example, criminal charges with no resulting conviction typically cannot be used by a consumer reporting company after expiration of a seven-year period, beginning at the time of the charge.

The CFPB guidance also brought focus to consumer reporting companies’ obligation to disclose people’s complete files upon request, as a way of resolving information that is misleading or false. Such information must be accurate and clearly presented, so that the average person can understand it. Moreover, the format enable the simple identification of inaccuracies and an expedited addressing of the adverse and false information.

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