RSSThe Consumer Financial Protection Bureau is cautioning credit reporting companies against sloppy credit file sharing practices and providing erroneous background check reports.
According to a Jan. 11 advisory opinion, consumer reporting agencies must comply with the Fair Credit Reporting Act when undertaking background screening by maintaining “reasonable procedures to avoid producing reports with false or misleading information.”
Consumer reporting agencies cannot include background checks with “information that is duplicative, outdated, expunged, sealed, or otherwise legally restricted from public access,” according to the CFPB. Customers must also be allowed to access personal data upon request and be provided with the sources of the data in their files.
According to the CFPB, agencies must ensure that disposition information includes any arrests, criminal charges, eviction proceedings or other court filings not included in background check reports. Consumer reporting companies cannot provide information on criminal charges that did not result in a conviction beyond the seven-year period beginning at the time of the charge.
Previous CFPB research has found that background check reports on tenant screening frequently include “false or misleading information about individuals.” Such reports can include credit history, employment, rental history, salary, professional licenses or driving records along with criminal arrests and convictions.
“Background check and other consumer reporting companies do not get to create flawed reputational dossiers that are then hidden from consumer view,” said CFPB Director Rohit Chopra. “Background check reports, and all other consumer reports, must be accurate, up to date, and available to the people that the reports are about.”
The report was released after the CFPB and Federal Trade Commission launched a public inquiry early last year asking for people’s experiences with background checks to screen prospective tenants for rental housing. The agencies received more than 600 comments in response, mostly from renters, the CFPB said. They described not receiving adverse action notices and learning of inaccuracies and errors that were challenging to correct and had a long-term impact on their housing opportunities. Many alleged that biases in criminal and credit systems had transferred into housing decisions.
