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Tenant Background Screening Company Settles With FTC for $4.25 Million

On December 8, 2020, AppFolio, Inc. reached a settlement with the FTC for alleged violations of the FCRA to the tune of $4.25 million.  AppFolio provides tenant background screening reports about consumers to property management companies to help the companies, among other things, select tenants. 

The FTC’s Complaint alleged that AppFolio, up until at least June 2019, was reporting Eviction Records and non-conviction criminal records that were more than seven years old in violation of the FCRA, 15 U.S.C §1681c(a).  The Complaint further alleged that AppFolio violated the FCRA by failing to follow reasonable procedures to ensure that eviction and criminal records received from a third party were accurate before including that information in its reports. As a result of AppFolio’s failure to follow reasonable procedures to assure maximum accuracy, many of the Tenant Screening Reports that AppFolio provided included, among other things, records for individuals with a different name from the applicant, records with a missing or inaccurate disposition, and multiple entries for the same criminal or eviction action. Due to these inaccuracies, some applicants may have been denied housing opportunities. The Complaint further alleges that despite receiving consumer disputes about the reporting of the inaccurate information, AppFolio did not make any changes to its practices or procedures to address the problems.

Without admitting any wrongdoing on its part, AppFolio agreed to a $4.25 million monetary penalty with the FTC. The proposed settlement also prohibits AppFolio from providing non-conviction or eviction records older than seven years and requires AppFolio to maintain reasonable procedures to assure maximum possible accuracy of consumer information in its reports.  

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