Consumer Alert
Tenant screening practices: the FTC wants to learn more
According to U.S. Census data, more than one third of U.S. households rent their home — that’s more renters than at any point in the last 50 years. Every year, millions of people go through the process of looking for and renting a home. The application process can be expensive and not so transparent, and often requires prospective tenants to undergo a background screening process. Tenant screening reports often include criminal and eviction records, and some tenant screening companies provide recommendations to landlords about whether to accept a prospective tenant’s application.
Tenant screening practices also impact some groups more than others. According to Pew Research Center, Black, Hispanic, or young people are more likely to rent rather than own, and so tenant screening practices are more likely to impact these populations.
The Federal Trade Commission and the Consumer Financial Protection Bureau want to better understand how these issues are playing out across the rental housing industry. To learn more, the FTC and CFPB have put out a Request for Information to get comments from tenants, prospective tenants, tenants’ rights and housing advocacy groups, property managers, landlords, tenant screening companies, and others about their experiences.
To file a comment, submit it online at ftc.gov/tenantscreening. Your comment will be public, so don’t include any confidential or sensitive information. Your comment must be submitted by May 30, 2023.
Rental contracts are entered into under State Law.
Why are you interfering in State Law matters?
In reply to Rental contracts are entered… by James Campbell
because sometimes state laws conflict with the federal Constitution, as amended, or actions which courts may have determined an action not prohibited by a state, such as "red-lining" does violate federal laws or the Constitution & its amendments as currently interpreted by the US court system.
In reply to Rental contracts are entered… by James Campbell
A discussion is not "interference." It is free speech.
Also, when state law and tenancy practice BREAK FEDERAL LAW, such as the American Disability Act, for one simple example, IT. MOST CERTAINLY IS. A FEDERAL ISSUE, sweetie pie.
In reply to Rental contracts are entered… by James Campbell
Because greed in this country is insidious in this country and slum lords have no bottom! My daughters landlord continues to raise the rent $100. each year, now she has to move out! He's never made improvements to the apartment. Where is she to go when rents in CT are now 1200. for bad areas and 1600. for safe decent areas. She is now forced to move away from our family and is considering NJ, etc. This greed affects employment and changes a person's whole life. The background checks have affected her credit before she's even able to see the place. How are businesses able to keep up with the ridiculous cost people just trying to live and feed themselves? I'm mad as hell that the rental process and exorbitant rising costs of rent are as much as a mortgage. Everyone has moved towards rental because of the low inventory for potential homeowners allowing rental landlords to name their price. This is the new crime in America since covid.
In reply to Rental contracts are entered… by James Campbell
Why do you feel so threatened. Are you afraid things will change and you wont be able to rob your prospective tenants anymore? At this rate, you wont have any prospective tenants because nobody will be able to meet all your overly stringent requirements.
And then where will you be? You'll be the owner of empty properties. With a bunch of homeless camping outside your house because they have no where else to go.
In reply to Rental contracts are entered… by James Campbell
Because the states do not protect the renter. It is lopsided in favor of landlords. Fees upon fees upon application fees. Nickel and dime you like you own the place. Last place I applied had more papers to sign and background checks, app fees etc. than my last home I bought. They are taking advantage of a bad economy.
I would really be interested in this.
I own my own home. I am in my sixties. I worked as a property manager for over 13 years beginning in 1980. I believe that this background check and credit check and humiliation process is just absolute nonsense! First off, this is a business and there is a cost to operate a business, the cost of credit checks is part of that. If you are going to be highly selective as to whom you are going to rent to, and everyone else in the industry, forcing people to have to apply at up to 10 prospective new homes at any given point in time, then to expect them to pay you $35-$50 per application is utter nonsense AND greedy. The cost the bank charges for each credit check is half that amount. This is the cost of running a business. Landlords think that it is up to the tenant to pay for their operating costs as well as the monthly "rent". This is ludicrous. I am also an advocate for the homeless and it astounds me that people don't get why the homeless population continues to grow and why there is recidivism by people who have been convicted of a crime in the past. People also end up in hard times no matter who they are and a credit check reflecting any kind of a past struggle is also used against them even if it's only late pays or maybe even a bankruptcy. Landlords don't get it that a person can't file a bankruptcy after one has already been filed within a 7-10 year time period so that recent bankruptcy means diddly squat! Stop helping to increase the homeless population, the amount of digging a future landlord can do should be limited and the cost of the application process should NOT be borne by the prospective tenant.
In reply to I own my own home. I am in… by Concerned Consumer
Let the free market decide on the application fee, just like it does with collect applications.
Even if the tenant cannot declare bankruptcy, it is not easy to collect if the tenant just says "I ain't giving you nuttin and am not moving until law enforcement makes me". Finding the asset, getting an attachment order, and executing it before the assets can be moved is often not worth it unless you are a big landlord willing to pay more than you collect to enforce unit discipline in your tenant population.
As to "not meaning squat", a recent bankruptcy could very well mean this prospective tenant has a greater than average chance of not paying rent.
In reply to I own my own home. I am in… by Concerned Consumer
I agree with literally EVERYTHING you have said. Landlords are incredibly ignorant about real life. When we tip the safety scales with so many homeless "normal" people, we will see civil unrest the likes of which this country cannot now imagine. It is SICK.
In reply to I own my own home. I am in… by Concerned Consumer
Perfectly said!
In reply to I own my own home. I am in… by Concerned Consumer
Amen.. No one should have to pay for applications. I've seen charges as high as $200+ and that tells me somebody is making under the table bucks.
In reply to I own my own home. I am in… by Concerned Consumer
Thank you for your comment. I wish more landlords were as educated and honest as you. You hit the nail on the head, your perception is so on target. The homeless are lucky to have you as an advocate. I wish you were my landlord.
In reply to I own my own home. I am in… by Concerned Consumer
You are so right...I've processed and closed home loans for many years...A credit scores does NOT indicate that you will pay rent on time! It never has and it never will...
In reply to I own my own home. I am in… by Concerned Consumer
As someone who is currently struggling with homelessness I can't even begin to vocalize the difficulty when it comes to the costs, the fees, the screening process, and then more fees because at times all I can do is cry. All I want to currently do is hug you and say thank you! Thank you for who your are as a person! The truth behind your words are 100% spot on. Not everybody's situation is one in the same and I understand the risk properties/ owners take when renting. But, one would think they would rather charge a little less for rent so that way their properties are rented and occupied by a tenant who they know can pay the rent every month and on time, instead of charging double the market value!?!?! Or is there a "term" where properties lure tenants in just to find ways to evict them shortly after? Just to have it be a never ending cycle? Which some may not see because when you check for eviction information through the courts for a property and you find evictions for the past year filed under 5 different plaintiff names!? Is it just me or is that sneaky?
I believe the cost of applying for an apartment is costly enough, especially the fixed and low income people.
With rent/moving increasing monthly, it's near impossible to pay first/last months rent, application fees, pets deposits, etc. I don't feel we as a consumer should pay those fees. If the landlords want to know this information, they should pay.
Real estate ownership is a fundamental right and it constitutes the largest asset of most owners. The ability of a bad tenant to do damage far beyond their monthly rent or security contract makes it a risky venture anytime, let alone when someone who has no accountability for the result can tell you who can rent your property. Why shouldn't a property owner have complete freedom in screening applicants? Is someone from the FTC going to step up and assist with repairing/replacing damaged property after controlling the process based on something that isn't even provable in most cases? Past bad behavior is the only real criteria for assessing the probability of bad future behavior.
In reply to Real estate ownership is a… by James Wolfe
For your information most home damage is done by those who have no criminal record, A-1 credit, and a host of other formal privileges due to a report, but you fail to do the reserch, because the industry directs you blindly to use they're services to discriminate base on other criterias other than race. As stated most renters are Hispanic, black,young and underprivileged. Certainly these groups can't be frowned upon overtly, so it's done covertly.
In reply to Real estate ownership is a… by James Wolfe
Your perception of renters is so biased. I dont know where you have been or who filled your head with such greedy opinions. But i only wish for you to be in the position that your prospective tenants have been in so you know what it feels like to be so close to being homeless. And to know the only thing between having a place to rent or being homeless is some one like you.
In reply to Real estate ownership is a… by James Wolfe
Credit scores for a rental DO NOT tell the integrity of that person's family! I've done loans nationwide since 1987 and any lender will close a loan to fund with a Discharged BK, and any credit discrepancies that can be explained...Folks like you don't even claim the income from the rentals when I review their tax returns...I hope you're not one on them...
As a retired senior on a fixed income I have lately applied for HUD senior housing. I have become concerned as to who has access to the very detailed private information required on these applications. Experience has alerted me to some of the hired of the various complexes. I have in another venue been scammed out of $15,000. Thus my concern.
It's impossible to rent decent apartment with these skyrocket increases not to mention the three times salary you are required to meet, also the applications fees are outrageous.
In this type of screening you must ask the wright questions because their are at least two different opinions from both sides of the equation
a couple of years ago my brother and I applied at a place in Everett Wash. They wanted a $50 non-refundable deposit. The rent was to be 40% of our income. We were both on SSI. The catch was that they also wanted to take control of our finances and any money we received they also wanted 40% of that too. We were selling our home and they wanted 40% of that and 40% of my brother's teamsters pension. They wanted a criminal record background check done and our income tax statements as well. They would not rent to us unless we gave them all that. Now we live in a "normal" condo but since new owners took over 5 years ago, our rent has gone up 15% a year, and $75 a month for our parking spaces. We also pay an extra Power bill using California prices so we are paying their Power bill on top of rent. Our fixed income has reached its limit and now we have to move. No help for us two old times. Corporate Greed needs to be toned down.
I ask the prospective tenant 5 questions: when do you want to move? Why do you want to move? Do you have a criminal background? Have you ever been to court for nonpayment of rent? What is your monthly income? And then I pay someone to do a background check.
I have been a tenant for about 9 years now, and I have found the process of renting an apartment expensive and frustrating. Each landlord I’ve sought to rent from has required an application fee but did not tell me the criteria, so I had to apply before I knew if there was any chance I could rent from them.
If they had told me up front that I had to earn $x to rent, or I had to be at my current job for t amount of time, I might have saved a lot of money and frustration applying for apartments where I was turned down.
No landlord ever told me why I was turned down.
I understand that it costs a landlord money to screen applicants, but if the criteria were clearly stated up front and the reasons for rejection were also clearly stated, this process would be easier and cheaper for both landlords and tenants.
In reply to I have been a tenant for… by Carol Mitchell
Exactly my daughter's experience you have to make 3-5 times the amount of the rent. Absolutely ridiculous, two times the amount should be sufficient and is not an indication of a good tenant only an indicator that they can raise the rent each year. No amount of money is enough. My daughter's landlord said I can 1650. for the apartment now days so unless you can pay that you need to move out. Strong arm tactics! Disgusting!
These landlords make money off prospective tenants by charging them non-refundable application fees even if they have no intention of renting to them. They do credit checks that affect our scores too and if they do that we are paying for that as well. There are no laws to protect us.
Former property manager here; We used credit reports to assess our financial risk of a prospective tenant, also making sure that they were not going to be getting in over their heads with the rent amount plus their other debt service. In an apartment building, it's important that ALL tenants pay their fair share and contribute to the operation expenses of the property: taxes, trash & snow removal, lawn care, water & sewer utilities plus the cleaning crew to keep the common areas or hallways sanitary and tidy. Criminal background checks were conducted to help ensure the safety of other residents, property staff, and visitors. If someone has bad credit or drug, sex, or violent criminal convictions, these are usually a result of poor life choices- stop coddling these people and heading right to the "race card." The correlation you're trying to make is ridiculous. Become a landlord yourselves and walk in the shoes of someone you're trying to regulate
I was once turned down for housing because my credit score was one point from the minimum requirement. On another occasion my partner & I were denied an apartment because of a marajuana charge from his son who had just turned 18.
i feel that too many renters are being pushed away based on their gender , and the screening process is a joke because if a landlord did not like you they will say anything against you
Thank you for these amazing emails you send which are so informative.
I’m on disability & I needed to find a low income housing. I got on a list & paid an application fee of $30. 7 years later I received a call. I was so happy. I had to pay another $30 application fee. They showed me the place. I’m so happy. A week later they said I was turned down because of my credit. I lost my home after my husband passed away. I had less than $6,000. Worth of bad credit. One was a truck for around $4500.00. I tried to return the truck 2 days later cos the transmission went out. Then twice the motor blew. I rarely had the truck to even drive. I put $4,000.00 down & they just didn’t want to give that back. They picked up the truck. So that was why my credit was bad. I wrote a letter & begged to please give me the chance for that apartment. I never got it.
Ive experienced landlords requesting high amounts for credit checks for each adult. When most have a subscription and pay a low yearly fee and can run as many applicant as they want. Yet they charge way too much and make huge profits. Or they have no vacancies and collect application fees to make extra money. Sometimes they can make thousands of dollars
In reply to Ive experienced landlords… by April
Having worked for a Minister who bought up old houses and repaired and cleaned them the rented at reasonable payments (according to the income of the rentees) to families who might otherwise be homeless, I have cleaned some pretty horrific houses after the rentees left. Some are so trashed they had to be rebuilt. Almost all had trash and broken furniture, stolen housewares, (in the furnished houses) and had to be de-bugged and rat infested, because of rotting food, dirty diapers, clogged toilets, Soiled mattresses, and just plain filth. I cleaned several of his houses each month. Usually a 2 -3 days work on each. Hauled truckloads of garbage to the dump, and left a sparkling clean home, which after painting, recarpeting, and replacing furniture and housewares, he would rent it to the next family. All without any background checks etc. He lost money on every rental. I can see where a nice apartment or house really has to have at least some background checking before letting renters come in. But no landlord should be allowed to charge a person just for an application, or charge for a credit check etc. That is just a part of doing business.
In reply to Having worked for a Minister… by Darline Duncan
That's what a deposit is for. An admin fee of $200 and then rental application fees for anyone over 18 that are $60 a pop. For majority of places who will deny you. But like another person said, many of landlords or property's have yearly contracts or agreements with companies for unlimited number of screenings.
In Texas Leasing Agencies Rule. Tenants may have rights but if you enforce them your lease will not be renewed. No explanation that's their' right. 25 ways to screen you out.
I use third-party services like Zillow Rental or others to have the applicant provide their personal info and pay them directly so I don't have to worry about having their confidential information. When picking a service I look at the fee to make sure it doesn't look excessive compared to similar services.
Hi ftc.gov administrator, Your posts are always well-balanced and objective.
Its so tragic and disrespectful that the local laws and national authoritive agents, politicians and our Superior Courts are not addressing this matter of scamming the renters out of up-front money and having access to very personal and confidential information they do not need to have in their possession. A lot of fraud is committed at these companies by the endless data-breaches and selling your/our information. We never had that problem until these credit reporting company for rentals and retails came out the woodwork! Never are these credit data miners, apartment managers, their staff, and online property management company properly trained to read and decipher credit scores and data. We have to have a license to do that in the mortgage industry! These folks and companies do not know how to properly decipher nor read credit reports properly! And these data miners that are "privately owned companies" to sell subscriptions for the purpose of rental decisions should be banned! They (the property management companies) lie and say you didn't pass and there is no way to see the results...You know why? Because they can't and wont have to do show you due to the property managers and property owners are not a credit reporting agency - AND found that most of the property managers and their assistants DO NOT enter the correct information...Blatant DISCRIMINATION exist! They failed to enter the clients specific information off the application in the system by leaving out crucial data that will make the application approved! I have caught them on many occasions when the results came back and would write in for the reason of denial and found all of the applications submitted online to then be submitted to the credit reporting data-miners was missing the correct income, length of employment, etc. for that application to pass for an approval!
As long as I have been closing loans as a mortgage banker/consultant for Realtors and borrowers nationwide (San Francisco to Washington DC) since 1987, have never seen the amount abuse and corruption of our credit reporting system and all the false data that is put on the clients credit profiles until now and the last 18 years! Most of my loans with ANY lender only wants a bankruptcy to be settled, CLOSED and DISCHARGED and I can fund the loan with ANY lender for a purchase of refinance that same day!
The local consumer credit laws in California are a little better, the Nevada NRS consumer credit laws are on the books to use but need to be enforced! Any written agreements in default in Nevada NRS are to be taken off in four (4) years, and oral agreements are to be removed off in two (2) years! These credit reporting companies do not respect the laws and keep out-dated credit lines on your/our personal credit reports! Our local laws need to be respected and enforced or ban the consumer credit reporting systems all together! We never-ever needed it in past! And its a royal mess now! More homelessness will get worse if you as a government agency don't ban them from disrespecting our working class families and people of color just to make a profitable business to be on the Stock Market at our expense!
Doesn't it ever occur to you WHY there are 3-4 credit reporting companies in the first place?!? None of which are correct...Too many discrepancies, too many problems, too much homelessness due to these facts...
WHY are these "privately owned credit mining companies" popping up all over the place just because they bought some software to bogus credit information that contain many errors where you/we are "punished" for removing false and incorrect discrepancies? Yes, your credit points go down all of a sudden by as much as 40-50 points when you place a complaint of a discrepancy! Now you can't even buy a home which is easier to BUY a home than to Rent thanks to the credit reporting databases that contain incorrect information...We have to be LICENSED AND HELD ACCOUNTABLE BY the many government agencies and laws throughout the country to even pull or generate a credit report!
The credit reporting company EXPERIAN (These are not agencies, they are privately owned businesses) has even told me to answer a "survey" of very confidential and personal questions (What is your race? Do you have any children? How old are you? etc.)...So this goes to SHOW these credit reporting companies are tagging our files for race discrimination for higher interest, lower FICO scores and many denials for rentals and consumer credit lines! I've kept every single credit denial, every credit score change and every screenshot of these horrendous personal questions on my personal credit profile...By the way, I was also a Fraud Investigator at a major international bank, and YES the data in LexisNexis is incorrect too...And is the very company where the four (4) major credit reporting companies also obtain their information to put on your credit report! I have permanently "OPTED-OUT" of all of them!
Oh by the way...there isn't any way to date since I have been using Equifax, TransUnion and Experian to regain those lost credit score points back onto your credit report once they have been taken off by incorrect discrepancies on your/our credit files! You cannot and will not gain them back due to their mistakes of a company or person or the credit reporting agency putting incorrect and outdated credit data on your credit report just to make themselves appear authentic to sell their services to the next property owner or property management company!
We never-ever back in the day used "confidential information" (up until just recent as 2005) used a personal credit report to assess rental integrity! NEVER, that report has nothing to do with a person's ability to rent! Not only that issue, but these private industry credit reporting BUSINESSES do not have any way for the renter to submit a consideration for an isolated incident or explain for re-consideration for rental approval! Once its a NO, it's done and you wont receive your money back from all the rental applications you've submitted.
In addition, the same SALES staff of those credit mining database BUSINESSESS goes door to door to sell to most if not ALL the property management companies in the same city, county and state with the same incorrect data on folks personal profile! So you/we cant even go to another property to applicate because the next property manager sees you applied somewhere else too and the incorrect data on the credit file is seen by many that is not trained nor a professional in the field to correctly read a credit report! its sickening...HOMELESSNESS IS AT AN ALL TIME HIGH DUE TO THESE PRIVATE CREDIT DATA MINING COMPANIES SELLING INCORRECT CREDIT DATA DOOR TO DOOR TO MAKE MONEY AND RUIN LIVES!
I have went on the internet to actually see who owns this bogus credit reporting companies. And have accessed their profit reports (they brag about their profits of how their sales went up) from acquiring and scaring more folks into buying their services! Most of these privately owned companies are modeled after other countries out of the USA that shame their citizens when they owe debt! These privately owned credit data BUSINESSES are not regulated nor reprimanded for false reporting nor for taking off credit points when the information is in discrepancy! To date, there isn't any compensation for removing credit points off a personal credit file! This hurts the very working class American People who built this country, served this country, maintain the operations and structure of this country! Because the these privately owned credit score data-mining companies make the retail industry and property managers believe their investment can make them more money by charging more deposits, more interest rates and less benefits to buy a home to stop renting from these abusers!
Back in the day we used BEACON scores to close loans....not all these data-miner companies that sell your information!
In reply to Its so tragic and… by MsMJohnson
Thank you for taking the time to write this out. I recently found out about the opt out option and sent off all my letters last week. Found out 1 thing was reported wrong and sent me down a rabbit hole trying to understand this information. During my research I’ve realized the lack of information out there for everyday people. Or someone who has the knowledge wants to charge an extreme amount of money to help someone. They don’t teach them to set them up for success. This made me want to understand this better and help others. I know what it feels like trying to get qualified to buy a home and if you don’t have a mentor or someone willing to help it can seem overwhelming for the average person. It’s like you are just a number and if your case isn’t a simple approval, it feels like no-one wants to help unless they are benefiting from it. So I can appreciate someone who is taking their personal time to assist someone. We need more people like this in the world.
I was renting in an apartment complex of 4. A new president came in right before covid. I had to be background checked so did the others across the hall. The guy who moved in below me and the girl opposite me both have criminal records. One of identity theft. I lost my job due to her breaking into my network. That was a no-no for my rules while I worked remotely for retail before the covid. It is obvious he did not do any background checks. They both have been arrested for drug distributing off of these premises. Can I sue my landlord?
I feel that it should somehow be networked together, living on social security, paying $50 per credit& app fee leaves little to live on forcing homelessness while trying to find a rental unit. Then within the last year my rent has increased over $100. HUD increased my rent $50 because of my $20 increase S.S. payment& landlord increased rent $50 just 2 months ago.thats a huge increase on a fixed income& im disabled with a traumatic brain injury, on my way back to homelessness because the dramatic monetary increase on my rent
Recently my husband and I made a decision to move out of state. We began looking and apon finding a house we had to pay 80 for the application fee and then another was 100 the problem is we were $1,880 in the whole, and had no where to move to and husband had quit his job thinking we were going to move just to be scammed. How can we solve this problem before we are upside down??