Earlier this week, the Federal Trade Commission (“FTC”) sent a letter to six different data broker entities warning them that sharing consumers’ rental histories with current or prospective landlords could subject the data brokers to certain requirements of the Fair Credit Reporting Act (“FCRA”). This warning comes on the heels of the FTC’s decision in December to begin focusing on the privacy practices of the data brokerage industry in general. According to the FTC website:
Among the requirements cited in the letter are the companies’ obligation to protect the privacy of tenants whose information they collect, including ensuring that those requesting information about tenants have a legitimate reason to acquire it. The letter reminds the companies of their obligation to ensure that the information they provide is accurate, to give consumers a copy of the information about them on request, and to allow consumers to dispute information they believe is inaccurate. The letters also note that the companies must notify landlords of their requirements if they use the data to deny housing to a tenant, and to notify the sources of their information of the requirement that they provide accurate information.
While the FTC makes clear that it has not reached a conclusion regarding whether or not the six companies in question have actually violated the FCRA (the applicability of the FCRA depends, in large part on whether or not the landlords in question have utilized the data provided by the data brokers to make rental decisions), the warning should be heeded by any data broker that compiles and distributes rental histories. Especially considering the FTC’s recent scrutiny of the data broker industry.
Entities that fail to comply with the FCRA or other privacy laws, where applicable, could find themselves facing regulatory action from the FTC, or state regulatory bodies, which could result in significant fines, as well as other costs.
If you are interested in learning more about this topic or need to review your data collection, usage and/or distribution practices based on this FTC letter, please contact us at your convenience.