employment and tenancy background screening, verifications, references,

A Tale of Bad Practices: Background Screening and Tenancy

Landlord and Property Managers Beware

It only takes one bad tenant to ruin a rental business, as “Janet” – a real estate agent and property manager – discovered a few years ago after being scammed by a tenant who appeared to be above reproach.  The tenant – we’ll call him “Dave” – supplied Janet with a credit report and background screen that he obtained himself through an online credit website.  Then, rather than actually verifying the information herself through an unbiased CRAas she should have done – Janet only checked Dave’s employment references and income.  Everything appeared legitimate on the surface, so Janet signed a lease for a condo with Dave and collected his checks for the first month’s rent and a security deposit.  She also gave the keys to Dave, even though she had not yet verified that the checks – or the background and credit information – were good.

Within days, Janet was informed that both checks bounced.  She quickly got in touch with Dave to let him know; he was apologetic and immediately wrote her two new checks to cover his expenses, but they bounced, too.  Janet knew she was dealing with someone less than scrupulous when the bank manager informed her that Dave had four accounts with the bank, all with balances of less than ten cents.

The police were brought in, but they simply told Janet that the matter belonged in eviction court; technically, no crime had been committed.  Janet prepared well for her court date, but just moments before she was due to appear before the judge she received a text message from Dave saying, “I’ve moved out, you’ll never find me.”  Since Dave did not appear in court, Janet “won” the eviction hearing, but was left with no way to collect.  Immediately afterward, she discovered that Dave had flooded the condominium, causing thousands of dollars’ worth of damage that Janet would never be able to recoup.  Not only was Janet’s reputation tarnished, but the owner was left a costly mess to repair.

Now, Janet says, she’s learned her lesson.  She never gives the keys to a tenant without first confirming receipt of payment, and she always conducts her background checks and verifications through a reputable service.

Tenants Have Rights Too!

On the flip side, as potential tenant, Timothy Lance Hill learned in April 2015, even large companies that provide background screening can make mistakes.  Hill recently filed a lawsuit against a large screening company based in Atlanta, GA because of adverse information that appeared on his credit and tenancy reports when he tried to rent an apartment for his daughter.  The inaccurate information, Hill contends, includes a felony drug conviction in Arkansas, which Hill claims is not a conviction against himself, but rather someone completely unknown to him.

In the lawsuit, the Consumer Reporting Agency is accused of not only returning inaccurate information against Hill but also of failing to follow up with Hill to correct any inaccuracies regarding the reported conviction as FCRA law requires.  Hill says he has suffered actual damages in the form of the lost rental opportunity, harm to his reputation, and emotional distress for the humiliation and embarrassment he has suffered as a result of the defendant’s action.

At The Cedalius Group, the employment and tenancy background screening provider you can trust, we fully understand the FCRA-driven obligations that a great CRA must adhere to.  We provide our clients with the most current information regarding all FCRA regulations and case law related to employment and tenant background screening.  For more information about how our Tenant Scorecard™ can work for you, visit us online or call 404.963.9862 today!

The Cedalius Group offers insight into the background screening industry for educational purposes.  We always recommend you consult with your legal counsel to determine practices that best suit your business needs.