TransUnion Rental Screening Solutions, Inc. and Trans Union LLC
Documents in this case
Case summary
On October 12, 2023, the Bureau and the Federal Trade Commission filed a joint complaint and stipulated order against TransUnion Rental Screening Solutions, Inc., a Delaware corporation with its principal place of business in Greenwood Village, Colorado, and its parent company, Trans Union LLC, a Delaware company with its principal place of business in Chicago, Illinois (collectively, TransUnion Rental Screening). TransUnion Rental Screening is a consumer reporting agency that provides tenant and employment background screening reports to thousands of client rental property owners, property management companies, employers, and other background screening companies throughout the United States to assist users in selecting tenants and employees. The complaint alleged that TransUnion Rental Screening violated the Fair Credit Reporting Act by failing in numerous instances to (1) follow reasonable procedures to assure maximum possible accuracy of eviction records in its tenant screening reports; and (2) when it obtained criminal and eviction records from third-party vendors, identify the third-party vendor as a source of the records in its disclosures to consumers. As the complaint alleged, inaccurate and misleading information in tenant screening reports can significantly interfere with consumers’ ability to find housing and cause them harm, including prolonged housing searches, additional application fees, time and money spent correcting errors, higher rental payments, temporary housing costs, and denial of housing. The stipulated order, which the court entered on October 18, 2023, requires that TransUnion Rental Screening take specific actions to ensure maximum possible accuracy of its tenant screening reports and provide complete disclosures to consumers who request them. It also requires TransUnion Rental Screening to pay $11 million in consumer redress and a $4 million penalty to the Bureau.
Order
PDF of this document (24 pages)
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Page 1 of 24 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 1:23-cv-2659 FEDERAL TRADE COMMISSION, and CONSUMER FINANCIAL PROTECTION BUREAU, Plaintiffs, v.
TRANSUNION RENTAL SCREENING SOLUTIONS, INC., a Delaware corporation, and TRANS UNION LLC, a Delaware limited liability company, Defendants.
STIPULATED ORDER FOR PERMANENT INJUNCTION, MONETARY JUDGMENT, CIVIL PENALTY JUDGMENT, AND OTHER RELIEF The Federal Trade Commission (“FTC”) and Consumer Financial Protection Bureau (“Bureau”) (collectively, “Plaintiffs”) filed their Complaint for permanent injunctive relief, monetary relief, a civil penalty, and other relief in this matter, pursuant to Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 53(b); Section 621(a)-(b) of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s(a)(1), (b)(1)(H); and Sections 1054(a) and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5564(a) and 5565. Defendants have waived service of the summons and the Complaint. Plaintiffs and Defendants stipulate to the entry of this Stipulated Order for Permanent Injunction, Monetary Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 1 of 24
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Page 2 of 24 Judgment, Civil Penalty Judgment, and Other Relief (“Order”) to resolve all matters in dispute in this action between them.
THEREFORE, IT IS ORDERED as follows:
FINDINGS 1.
This Court has jurisdiction over the parties and the subject matter in this action. 2.
The Complaint charges that Defendants violated the FCRA, 15 U.S.C. §§ 1681-1681x, in the sale of Consumer Reports by TransUnion Rental Screening Solutions, Inc. 3.
Defendants neither admit nor deny any of the allegations in the Complaint, except as specifically stated in this Order. Only for purposes of this action, Defendants admit to the facts necessary to establish jurisdiction over them and the subject matter of this action. 4.
Defendants waive any claim that they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, and agree to bear their own costs and attorney fees.
5.
Defendants and the FTC waive all rights to appeal or otherwise challenge or contest the validity of this Order.
6.
Defendants and the Bureau waive all rights to appeal or otherwise challenge or contest the validity of this Order. Defendants do not intend to waive, and thus expressly reserve, their ability to assert that the Bureau’s funding mechanism violates the Appropriations Clause in any other proceeding brought against them by the Bureau, such as in Consumer Financial Protection Bureau v. TransUnion, et al., No. 1:22-cv-1880 (N.D. Ill.), but Defendants will not claim that this Order is invalid.
7.
The parties agree that this Order resolves all allegations in the Complaint. Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 2 of 24
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Page 3 of 24 DEFINITIONS For the purpose of this Order, the following definitions apply: A.
“Adverse Action” means:
1.
A denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance;
2.
A denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee; 3.
A denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status; or 4.
An action taken or determination that is:
a) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account to determine whether the consumer continues to meet the terms of the account; and b) adverse to the interests of the consumer.
B.
“Affected Consumers” includes:
1.
Each consumer who, between December 1, 2015 and the date of entry of this Order, disputed a record with Defendants, either directly or through a reseller, which resulted in Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 3 of 24
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Page 4 of 24 a change related to an Eviction Proceeding Record that the Defendants associate with such consumer, and where the dispute concerned the disposition or outcome of an Eviction Proceeding, a “judgment amount” associated with an Eviction Proceeding, or the reporting of a Sealed Record from an Eviction Proceeding.
2.
Each consumer for whom the following conditions are met: a) Defendants issued a recommendation between September 1, 2016 and the date of entry of this Order that the consumer’s application for housing be denied based on an Eviction Proceeding Record that the Defendants associated with such consumer and the criteria associated with the customer receiving the recommendation, and b) Defendants associated an Eviction Proceeding Record with the consumer that did not have an associated final outcome.
C.
“Background Screening Report” means a Consumer Report provided for employment or rental background screening purposes that incorporates or includes either an Eviction Proceeding Record or criminal record information or otherwise reflects a search for Eviction Proceeding Records or criminal record information, including when provided to a reseller. D.
“Bureau Enforcement Director” means the Assistant Director of the Office of Enforcement for the Bureau, or his or her delegate. E.
“Consumer Report” means any written, oral, or other communication of any information by a Consumer Reporting Agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 4 of 24
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Page 5 of 24 which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for any of the following purposes: 1.
Credit or insurance to be used primarily for personal, family, or household purposes;
2.
Employment purposes;
3.
By a person which the Consumer Reporting Agency has reason to believe: a) intends to use the information for employment purposes, b) intends to use the information in connection with a determination of the consumer’s eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status, or c) otherwise has a legitimate business need for the information (i) in connection with a business transaction that is initiated by the consumer, or (ii) to review an account to determine whether the consumer continues to meet the terms of the account; or 4.
Any purpose authorized by 15 U.S.C. § 1681b.
F.
“Consumer Reporting Agency” means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing Consumer Reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing Consumer Reports. Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 5 of 24
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Page 6 of 24 G.
“Consumer’s File” means, when used in connection with information concerning any consumer, all of the information on that consumer recorded and retained by a Consumer Reporting Agency regardless of how the information is stored. H.
“Defendants” means Trans Union LLC, a Delaware limited liability company, and TransUnion Rental Screening Solutions, Inc., a Delaware corporation, which is a subsidiary of Trans Union LLC as of the date of entry of this Order, individually, collectively, or in any combination, and their successors and assigns.
I.
“Eviction Proceeding” means any legal proceeding concerning a consumer’s habitation in, occupation of, or possession of land or real property and, where applicable, related monetary claims, including for rent or damages, such as eviction or forcible entry and detainer proceedings and any other proceedings reported in the same category as eviction or forcible entry and detainer proceedings. This term does not include mortgage-related proceedings against mortgagors that relate solely to mortgage payments and do not relate to the mortgagor’s habitation, occupation, or use of the property.
J.
“Eviction Proceeding Record” means any record associated with an Eviction Proceeding.
K.
“Frequency Report” means a report showing the frequency with which Eviction Proceeding Records are updated.
L.
“Investigative Consumer Report” means a Consumer Report or portion thereof in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 6 of 24
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Page 7 of 24 knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer’s credit record obtained directly from a creditor of the consumer or from a Consumer Reporting Agency when such information was obtained directly from a creditor of the consumer or from the consumer. M.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against either or both Defendants based on substantially the same facts as described in the Complaint. N.
“Sealed Record” means a record that has been sealed, expunged, or similarly excluded from the public record.
ORDER I.
PROHIBITED BUSINESS ACTIVITIES IT IS ORDERED that Defendants and their officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the provision of Background Screening Reports are hereby permanently restrained and enjoined from: A.
Failing to maintain reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom a Background Screening Report relates, including reasonable procedures designed to:
1.
Prevent the inclusion of multiple filings for the same Eviction Proceeding; 2.
Accurately reflect dispositions of Eviction Proceedings; 3.
Label data fields to describe accurately the contents of the data field; and 4.
Ensure that Sealed Records are not included in Background Screening Reports; Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 7 of 24
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Page 8 of 24 B.
Failing to, upon a consumer’s request for such Consumer’s File, clearly and accurately disclose to the consumer all sources of all information in the Consumer’s File, including but not limited to any vendors or other third parties from which Defendants directly acquire criminal record or Eviction Proceeding Record information in the Consumer’s File; except that the sources of information acquired solely for use in preparing an Investigative Consumer Report and actually used for no other purpose need not be disclosed; II.
AFFIRMATIVE REQUIREMENTS IT IS FURTHER ORDERED that Defendants must, in connection with the provision of Background Screening Reports:
A.
Develop, implement, and follow written procedures reasonably designed to prevent the inclusion in Background Screening Reports of any of the following: (1) any Sealed Record, (2) any Eviction Proceeding Record that does not have a final outcome, (3) multiple filings for any Eviction Proceeding, (4) any filing for an Eviction Proceeding other than the most recent filing evidencing the outcome or superseding post-judgment filing, such as satisfaction or release of a final judgment, or (5) any monetary amount associated with an Eviction Proceeding Record other than a final judgment amount or an amount reflecting full or partial satisfaction of such judgment, provided that Defendants must disclose to customers that any amount reported may include attorney or court fees or costs. Defendants also must monitor the effectiveness of the procedures, take corrective action to address identified issues, and retain records sufficient to demonstrate the implementation of this provision;
B.
Maintain a program to regularly monitor consumer dispute data relating to criminal records and Eviction Proceeding Records and to take corrective action internally or with public Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 8 of 24
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Page 9 of 24 records providers, including but not limited to vendors or other third parties from which Defendants directly acquire criminal record or Eviction Proceeding Record information, that includes root cause analysis of aggregated issues, and retain records sufficient to demonstrate the program, the issues identified, and the corrective action taken; C.
Maintain a committee, comprised of individuals responsible for: (1) the execution of Defendants’ compliance with the FCRA with respect to the provision of Background Screening Reports; and (2) overseeing Defendants’ compliance with this Order and the programs required by this Section. The committee must: (1) meet at least quarterly, (2) retain records sufficient to demonstrate the work of the committee, including minutes and materials from each meeting, and (3) regularly report on its work and Defendants’ compliance with the FCRA with respect to the provision of Background Screening Reports and this Order to the Board of Directors or a committee of the Board of Directors of the ultimate parent entity that controls Defendants (which as of the date of entry of this Order, is the publicly-traded company TransUnion); and D.
Retain all Frequency Reports created by any Defendant, if any, and received from Eviction Proceeding Record providers.
III.
CONSUMER’S FILE DISCLOSURES IT IS FURTHER ORDERED that Defendant TransUnion Rental Screening Solutions, Inc. must provide to any consumer, upon request and at no charge, all information in that Consumer’s File at the time of the request, including but not limited to all information that Defendant TransUnion Rental Screening Solutions, Inc. might provide to a customer or end user. IV.
ADVERSE ACTION TEMPLATE IT IS FURTHER ORDERED that Defendant TransUnion Rental Screening Solutions, Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 9 of 24
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Page 10 of 24 Inc. must make available to its customers and other end users of its Consumer Reports provided for rental background screening purposes a template for written Adverse Action notices consistent with the requirements of 15 U.S.C § 1681m. In addition, the template must also prompt the customer or end user to attach a copy of the Consumer Report and state the principal reason(s) for the Adverse Action. Defendant TransUnion Rental Screening Solutions, Inc. must make the template publicly available, including on its websites in close proximity to information about its provision of Consumer Reports provided for rental background screening purposes. V.
ORDER TO PAY REDRESS IT IS FURTHER ORDERED that:
A.
Within 10 days of entry of this Order, Defendants must reserve or deposit into a segregated deposit account Eleven Million Dollars ($11,000,000) for the purpose of providing redress to Affected Consumers as required by this Section. B.
Within 60 days of entry of this Order, Defendants must submit to the Bureau Enforcement Director for review and non-objection a comprehensive written plan for providing redress consistent with this Order (“Redress Plan”). The Bureau Enforcement Director will have the discretion to make a determination of non-objection to the Redress Plan or direct the Defendants to revise it. Each time the Bureau Enforcement Director directs the Defendants to revise the Redress Plan, the Defendants must revise and resubmit the Redress Plan to the Bureau Enforcement Director within 15 days. After receiving notification that the Bureau Enforcement Director has made a determination of non-objection to the Redress Plan, the Defendants must implement and adhere to the steps, recommendations, deadlines, and timeframes outlined in the Redress Plan.
Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 10 of 24
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Page 11 of 24 C.
The Redress Plan must:
1.
Specify the methodology that Defendants are using to identify Affected Consumers and state the number of Affected Consumers; 2.
Require Defendants to compensate by check each Affected Consumer on a pro rata basis;
3.
Identify the amount of redress to be provided to each Affected Consumer; 4.
Describe the processes for issuing, delivering, and tracking payments to all Affected Consumers, including the processes for handling any unclaimed funds; 5.
Specify the methodology Defendants will use to identify the mailing address for each Affected Consumer, which must include reasonable efforts to identify current mailing addresses, including and in addition to the U.S. Postal Service National Change of Address database;
6.
Provide that Defendants will send each Affected Consumer an explanatory letter that includes a statement that redress is being provided in accordance with the terms of this Order and states why the Affected Consumer is receiving the redress, as well as how the consumer can request a free copy of a Consumer Report for such consumer (“Redress Notification Letter”);
7.
Provide that Defendants shall not include in any envelope containing a Redress Notification Letter any materials other than the Redress Notification Letter and a payment to the Affected Consumer, unless Defendants have written confirmation from the Bureau that the Bureau does not object to the inclusion of additional materials;
Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 11 of 24
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Page 12 of 24 8.
Provide that if an initial mailing attempt fails, Defendants shall conduct further research to identify the Affected Consumer’s current mailing address and make at least one further mailing attempt;
9.
Provide an exemplar of the Redress Notification Letter and envelope; 10.
Describe timeframes and deadlines for implementing the Redress Plan, including the period during which redress checks will remain valid and available to negotiate;
11.
State that Defendants will pay all costs of administering redress required by this Order; and 12.
Describe all reporting that Defendants will provide to the Bureau and FTC concerning the Defendants’ provision of redress.
D.
After completing the Redress Plan, if the amount of redress provided to Affected Consumers is less than Eleven Million Dollars ($11,000,000), within 30 days of the completion of the Redress Plan, Defendants must pay to the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions, the difference between the amount of redress provided to Affected Consumers and Eleven Million Dollars ($11,000,000). E.
The Bureau may use these remaining funds to pay additional redress to Affected Consumers. If the Bureau determines, in its sole discretion, that additional redress to Affected Consumers is wholly or partially impracticable or otherwise inappropriate, or if funds remain after the additional redress is completed, the Bureau will deposit any remaining funds in the U.S. Treasury. Defendants will have no right to challenge any actions that the Bureau or its representatives may take under this section.
Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 12 of 24
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Page 13 of 24 F.
Defendants may not condition the payment of any redress to any Affected Consumer under this Order on that Affected Consumer waiving any right. VI.
ORDER TO PAY CIVIL MONEY PENALTY IT IS FURTHER ORDERED that:
A.
Under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the Complaint, Defendants must pay a civil money penalty of Four Million Dollars ($4,000,000) to the Bureau.
B.
Within 10 days of entry of this Order, Defendants must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
C.
The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by Section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). D.
Defendants must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Defendants may not:
1.
Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or 2.
Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 13 of 24
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Page 14 of 24 VII.
ADDITIONAL MONETARY PROVISIONS IT IS FURTHER ORDERED that:
A.
In the event of any default on Defendants’ obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable.
B.
Defendants relinquish all dominion, control, and title to the funds paid under this Order to the fullest extent permitted by law and no part of the funds may be returned to Defendants. C.
The facts alleged in the Complaint will be taken as true and be given collateral estoppel effect, without further proof, in any proceeding based on the entry of this Order, or in any subsequent civil litigation by or on behalf of the Bureau or the FTC, including in a proceeding to enforce the Bureau’s rights to any payment or monetary judgment under this Order, such as a nondischargeability complaint in any bankruptcy case.
D.
The facts alleged in the Complaint establish all elements necessary to sustain an action by the Bureau under Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and for such purposes this Order will have collateral estoppel effect against each Defendant, even in such Defendant’s capacity as debtor-in-possession.
E.
Defendants acknowledge that their Taxpayer Identification Numbers (Social Security Numbers or Employer Identification Numbers), which Defendants previously submitted to the FTC and Bureau, may be used for collecting and reporting on any delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.
Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 14 of 24
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Page 15 of 24 F.
Within 30 days of the entry of a final judgment, order, or settlement in a Related Consumer Action, the affected Defendant must notify the Bureau of the final judgment, order, or settlement in writing. That notification must indicate the amount of redress, if any, that such Defendant paid or is required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid. To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Defendants may not argue that any Defendant is entitled to, nor may any Defendant benefit by, any offset or reduction of any monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund. If the court in any Related Consumer Action offsets or otherwise reduces the amount of compensatory monetary remedies imposed against a Defendant based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, that Defendant must, within 30 days after entry of a final order granting such offset or reduction, notify the Bureau and pay the amount of the offset or reduction to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action. VIII. COOPERATION IT IS FURTHER ORDERED that Defendants must cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Defendants must provide such information in their or their agents’ possession or control within 14 days of receiving a written request from the Bureau. Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 15 of 24
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Page 16 of 24 IX.
ORDER ACKNOWLEDGMENTS IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this Order:
A.
Each Defendant, within 7 days of entry of this Order, must submit to the FTC and Bureau an acknowledgment of receipt of this Order sworn under penalty of perjury. B.
For 5 years after entry of this Order, each Defendant must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all business leaders and senior managers who have responsibilities related to the subject matter of the Order; (3) any service providers who have responsibilities related to the subject matter of the Order; and (4) any business entity resulting from any change in structure as set forth in the Section titled “Compliance Reporting.” Delivery must occur within 7 days of entry of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities. C.
From each individual or entity to which a Defendant delivered a copy of this Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of receipt of this Order.
X.
COMPLIANCE REPORTING IT IS FURTHER ORDERED that Defendants make timely submissions to the FTC and Bureau:
A.
Within 7 days of the entry of this Order:
1.
Defendant Trans Union LLC must, sworn under penalty of perjury: (1) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Bureau or FTC may use Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 16 of 24
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Page 17 of 24 to communicate with that Defendant; (2) identify all of Defendant Trans Union LLC’s businesses involved in providing legal or compliance support to Defendant TransUnion Rental Screening Solutions, Inc. by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; and (3) describe the legal or compliance support provided to Defendant TransUnion Rental Screening Solutions, Inc. and the involvement of any other Defendant. 2. Defendant TransUnion Rental Screening Solutions, Inc. must, sworn under penalty of perjury: (1) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Bureau or FTC may use to communicate with that Defendant; (2) identify all Defendant’s businesses by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; and (3) describe the activities of each such business, including the products and services offered, and the involvement of any other Defendant.
B.
Ninety days after entry of this Order, each Defendant must submit to the FTC and Bureau a list of all persons and their titles to whom this Order has been delivered pursuant to the Section of this Order titled “Order Acknowledgements.”
C.
One year after entry of this Order, each Defendant must submit a compliance report to the FTC and Bureau, sworn under penalty of perjury, in which, at a minimum, each Defendant must (1) describe in detail whether and how that Defendant is in compliance with each paragraph of this Order; and (2) provide a copy of each Order Acknowledgment obtained pursuant to the Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 17 of 24
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Page 18 of 24 Section of this Order titled “Order Acknowledgements,” unless previously submitted to the FTC and Bureau.
D.
For 5 years after entry of this Order, each Defendant must submit a compliance notice to the FTC and Bureau, sworn under penalty of perjury, at least 30 days before, or within 14 days after learning of the change, whichever is sooner, of any change to the following: (1) any designated point of contact; (2) the structure of any Defendant or any entity that Defendant has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; (3) the type or format of Background Screening Reports that Defendant offers; (4) if that Defendant begins providing Consumer Reports to customers in the United States or concerning consumers or transactions in the United States that include an Eviction Proceeding Record or criminal record information but are not Background Screening Reports; or (5) if any entity that Defendant has a majority ownership interest in or controls directly or indirectly that is not covered by the Sections of this Order titled “Prohibited Business Activities” or “Affirmative Requirements” begins providing Consumer Reports to customers in the United States or concerning consumers or transactions in the United States that include any Eviction Proceeding Record or criminal record information.
E.
Each Defendant must submit to the FTC and Bureau notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant within 14 days of its filing.
Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 18 of 24
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F.
Defendants must submit to the FTC and Bureau reports under penalty of perjury on all payments made pursuant to this Order. Defendants must submit a report quarterly and at the conclusion of redress and any disgorgement summarizing their payment compliance, including stating the total number of, and dollar amounts for, Affected Customers, checks mailed, and checks negotiated.
G.
Any submission to the FTC or Bureau required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: _____” and supplying the date, signatory’s full name, title (if applicable), and signature.
H.
Unless otherwise directed by an FTC representative in writing, all submissions to the FTC pursuant to this Order must be emailed to [email protected] or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: FTC & CFPB v. TransUnion 1823204. I.
Unless otherwise directed by a Bureau representative in writing, all submissions to the Bureau pursuant to this Order must be emailed to [email protected], with the subject line, “FTC and CFPB v. TransUnion Rental Screening Solutions, Inc. and Trans Union LLC, Case No. 23-cv-02659.”
XI.
RECORDKEEPING PROVISIONS IT IS FURTHER ORDERED that Defendants must create certain records for 5 years after entry of this Order and retain each such record for 5 years. Specifically, Defendants, in Page 19 of 24 Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 19 of 24
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Page 20 of 24 connection with the provision of Background Screening Reports, must create and retain the following records:
A.
Accounting records showing the revenues from all products or services sold; B.
Personnel records showing, for each person providing services, whether as an employee or otherwise: name, addresses, and telephone numbers; job title or position; dates of service; and, if applicable, the reason for termination;
C.
Complaints concerning the subject matter of this Order, whether received directly or indirectly, such as through a third party, and any response; D.
All employee training materials concerning the subject matter of this Order; and E.
All records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the FTC or Bureau.
XII.
COMPLIANCE MONITORING IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’ compliance with this Order:
A.
Within 14 days of receipt of a written request from the FTC or Bureau, Defendants must submit additional compliance reports or other requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents. B.
For purposes of this Section, the FTC or Bureau may communicate directly with Defendants, unless Defendants retain counsel related to these communications. C.
Defendants must permit FTC or Bureau representatives to interview any employee or other person affiliated with Defendants who has agreed to such an interview regarding: (a) this Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 20 of 24
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Page 21 of 24 matter; (b) anything related to or associated with the conduct described in the Complaint; or (c) compliance with the Order. The person interviewed may have counsel present. D.
Nothing in this Order will limit the FTC’s or Bureau’s lawful use of civil investigative demands under 15 U.S.C. § 57b-1 or 12 C.F.R. § 1080.6 or other compulsory process. XIII.
RETENTION OF JURISDICTION IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. SO ORDERED this 18th day of October, 2023.
_______________________________ Gordon P. Gallagher United States District Judge Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 21 of 24
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Page 22 of 24 SO STIPULATED AND AGREED:
FOR PLAINTIFFS:
Dated: October 10, 2023 FOR FEDERAL TRADE COMMISSION WHITNEY MOORE (DC Bar No. 496842) JARAD BROWN (CA Bar No. 294516) Division of Privacy and Identity Protection Federal Trade Commission 600 Pennsylvania Ave, NW, Mail Stop CC-6315 Washington, DC 20580 (202) 326-2645 (Moore) (202) 326-2927 (Brown) (202) 326-3392 (fax) [email protected] [email protected] Attorneys for the Plaintiff Federal Trade Commission s/Whitney Moore Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 22 of 24
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Page 23 of 24 Dated: October 10, 2023 FOR CONSUMER FINANCIAL PROTECTION BUREAU EMILY SACHS (VA No. 82437) PHILLIP HARRIS (NC No. 39740, AZ No. 036513) JOSEPH SANDERS (IL No. 6308241, NY No. 4397204) REBECCA SMULLIN (DC No. 1017451, CA No. 250274) 1700 G Street NW Washington, DC 20552 (202) 435-9424 (Sachs) (202) 435-7768 (Harris) (202) 377-9846 (Sanders) (202) 435-7546 (Smullin) [email protected] [email protected] [email protected] [email protected] Attorneys for the Plaintiff Consumer Financial Protection Bureau s/Emily Sachs Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 23 of 24
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Case No. 1:23-cv-02659-GPG Document 15 filed 10/18/23 USDC Colorado pg 24 of 24
Complaint ()
PDF of this document (16 pages)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 1:23-cv-2659 FEDERAL TRADE COMMISSION, and CONSUMER FINANCIAL PROTECTION BUREAU, Plaintiffs, v.
TRANSUNION RENTAL SCREENING SOLUTIONS, INC., a Delaware corporation, and TRANS UNION LLC, a Delaware limited liability company, Defendants.
COMPLAINT The Federal Trade Commission (“FTC”) and Consumer Financial Protection Bureau (“Bureau”) (collectively, “Plaintiffs”) bring this action against TransUnion Rental Screening Solutions, Inc. (“TURSS”) and Trans Union LLC (“TU LLC”) (collectively, “Defendants”) and allege as follows:
1.
The FTC brings this action under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 53(b), and Section 621(a)(1) of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s(a)(1), which authorize the FTC to seek, and the Court to order, permanent injunctive relief and other relief for Defendants’ acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FCRA, 15 U.S.C. §§ 1681-1681x. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 1 of 16
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2.
The Bureau brings this action under Sections 1054(a) and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5564(a) and 5565, and Section 621(b) of the FCRA, 15 U.S.C. § 1681s(b)(1)(H), which authorize the Bureau to seek, and the Court to order, permanent injunctive relief, monetary relief, civil money penalties, and other relief for Defendants’ acts or practices in violation of the FCRA, 15 U.S.C. §§ 1681-1681x. INTRODUCTION 3.
In numerous instances, Defendants have violated the FCRA by failing to follow reasonable procedures to assure maximum possible accuracy of information in background screening reports that landlords and others rely on to, among other things, make rental decisions about specific consumers (“Tenant Screening Reports”), and by failing to clearly and accurately disclose to consumers the sources of information in background screening reports. 4.
Inaccurate and outdated information in Tenant Screening Reports can significantly interfere with consumers’ ability to find housing and cause them harm, including, but not limited to, prolonged housing searches, additional application fees, time and money spent correcting errors, higher rental payments, temporary housing costs, and denial of housing. 5.
Plaintiffs filed this Complaint to stop Defendants’ unlawful practices, to obtain relief for harmed consumers, and to obtain a penalty. JURISDICTION AND VENUE 6.
This Court has subject matter jurisdiction over this matter under 28 U.S.C. §§ 1331, 1337(a), and 1345, and 12 U.S.C. § 5565(a)(1). Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 2 of 16
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7.
Venue is proper in this district under 28 U.S.C. §§ 1391(b)(1) and (b)(2), 15 U.S.C. § 53(b), and 12 U.S.C. § 5564(f), because Defendants are located, reside, or do business in this district and because a substantial part of the events or omissions giving rise to the claims occurred in this district.
PLAINTIFFS 8.
The FTC is an independent agency of the United States Government created by the FTC Act, which authorizes the FTC to commence this district court civil action by its own attorneys. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The FTC also enforces the FCRA, 15 U.S.C. §§ 1681-1681x, which imposes duties upon consumer reporting agencies.
9.
The Bureau is an independent agency of the United States Government created by the CFPA. 12 U.S.C. § 5491(a). The Bureau is charged with enforcing Federal consumer financial laws, including the CFPA and the FCRA. 12 U.S.C. §§ 5491(a), 5481(12), (14). The Bureau is authorized to initiate federal district court proceedings by its own attorneys to address violations of Federal consumer financial law, including the CFPA and the FCRA. 12 U.S.C. § 5564(a)-(b).
DEFENDANTS 10.
Defendant TURSS is a Delaware corporation with its principal place of business in Greenwood Village, Colorado and is a wholly owned subsidiary of Defendant TU LLC. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 3 of 16
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11.
Defendant TU LLC is a Delaware limited liability company with its principal place of business in Chicago, Illinois. TU LLC operates TURSS as a business unit and performs a variety of shared services for TURSS, including legal and compliance, accounting and finance, marketing and public relations, data science, and human resources. TU LLC also develops and approves FCRA-related policies and procedures used by TURSS. Throughout the relevant time period, TU LLC, through its officers or employees, has been responsible for, among other things, management and oversight of TURSS’s FCRA compliance policies and procedures, including monitoring and testing for regulatory compliance and compliance training. TU LLC participated in, directed, or authorized the acts and practices set forth in this Complaint. 12.
Defendants transact or have transacted business in this district and throughout the United States. At all times material to this Complaint, acting alone or in concert with others, Defendants have furnished background reports about consumers in Colorado and throughout the United States.
VIOLATIONS OF THE FAIR CREDIT REPORTING ACT 13.
Enacted in 1970, the FCRA became effective on April 25, 1971, and has been in force since that date. It has been amended several times, including by the Fair and Accurate Credit Transactions Act in December 2003 and the Dodd-Frank Act in July 2010. 14.
TURSS, through its provision of tenant and employment background screening reports, and TU LLC, through its provision of credit and other reports, are and have been “Consumer Reporting Agencies,” as defined in Section 603(f) of the FCRA, 15 U.S.C. § 1681a(f). That section defines a Consumer Reporting Agency as: Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 4 of 16
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[A]ny person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing [C]onsumer [R]eports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing [C]onsumer [R]eports.
Defendants regularly sell in interstate commerce information on consumers that they assemble or evaluate for the purpose of furnishing Consumer Reports to third parties, as described further below.
15.
The FCRA imposes several obligations on Consumer Reporting Agencies, including obligations to: (1) follow reasonable procedures to assure the maximum possible accuracy of the information in Consumer Reports, 15 U.S.C. § 1681e(b), and (2) upon a consumer’s request, disclose to the consumer all information contained in the consumer’s file and the sources of the information, 15 U.S.C. § 1681g(a). 16.
Pursuant to § 621 of the FCRA, 15 U.S.C. § 1681s, a violation of the FCRA constitutes an unfair or deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
TURSS’s Background Screening Reports Are Consumer Reports Subject to the Requirements of the FCRA 17.
TURSS has furnished background screening reports about consumers to thousands of client rental property owners, property management companies, employers, and other background screening companies throughout the United States, to, among other things, assist in tenant and employee selection. These background screening reports may include public record information, including criminal records and records related to residential eviction Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 5 of 16
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proceedings (“Eviction Proceeding Records”), obtained from multiple sources. In addition, the background screening reports may include credit information obtained from Defendant TU LLC. 18.
The background screening reports that TURSS has sold to clients are “Consumer Reports” as defined in Section 603(d) of the FCRA, 15 U.S.C. § 1681a(d). They are communications of information, including public record and credit information, by a Consumer Reporting Agency; the reports bear on, among other things, consumers’ credit worthiness, general reputation, and personal characteristics; and they are used or expected to be used as a factor in determining the consumer’s eligibility for employment or for rental housing pursuant to Section 604(a)(3) of the FCRA, 15 U.S.C. § 1681b(a)(3). Eviction Proceeding Records and Events 19.
The process of attempting to evict a tenant can result in a variety of different events being reported on the court record (“Events”). These Events could include the filing of a new civil matter to begin the process with the court (also known as a civil new filing) and the filing of an outcome of the proceeding. An eviction might also have post-judgment filings, such as a satisfaction of judgment. These Events are reflected in Eviction Proceeding Records. 20.
Eviction Proceeding Records may also include, among other items, the amount sought by the plaintiff landlord, any judgment amount that the court awards, and amounts owed that reflect consumer payments on a debt.
21.
Courts may seal or expunge the records reflected in Eviction Proceeding Records at the request of a consumer or pursuant to applicable state laws, among other reasons. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 6 of 16
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22.
TURSS has furnished hundreds of thousands of Consumer Reports containing Eviction Proceeding Records to clients every year. Failure to Follow Reasonable Procedures to Assure Maximum Possible Accuracy 23.
Section 607(b) of the FCRA, 15 U.S.C. § 1681e(b), requires that “[w]henever a [C]onsumer [R]eporting [A]gency prepares a [C]onsumer [R]eport it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”
24.
In numerous instances, TURSS has failed to follow reasonable procedures to assure maximum possible accuracy of Eviction Proceeding Records in its Tenant Screening Reports. TURSS has not followed reasonable procedures to: (1) prevent the inclusion of multiple entries for the same eviction case in Eviction Proceeding Records, (2) accurately report the case disposition in Eviction Proceeding Records, (3) accurately label data fields in Eviction Proceeding Records, and (4) prevent the inclusion of sealed Eviction Proceeding Records. 25.
TURSS’s failure to follow reasonable procedures to assure maximum possible accuracy of Eviction Proceeding Records has been knowing and reckless. Multiple Entries for a Single Eviction Case 26.
TURSS has failed to follow reasonable procedures to prevent the inclusion of multiple entries for the same eviction case in Eviction Proceeding Records in Tenant Screening Reports.
27.
When reporting Eviction Proceeding Records in Tenant Screening Reports, TURSS’s procedure has been to display each Event in a case as a separate entry in the report. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 7 of 16
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28.
TURSS also previously reported Events from one case interspersed with Events related to other cases.
29.
For example, prior to April 2021, TURSS would display a single eviction case that had two Events—such as a civil new filing and a judgment of possession—as two separate entries. On the same report, TURSS would also display a second eviction case that had two Events—such as a civil new filing and a civil dismissal —as two separate entries, with the entries for the second case interspersed among the entries from the first case. As a result, the consumer’s Tenant Screening Report would display four separate entries when there were only two eviction cases.
30.
In April 2021, TURSS began to group all Events for a single eviction case together. TURSS only took this step after receiving a Civil Investigative Demand from the FTC. TURSS continued to provide the old versions of the reports to some customers. 31.
TURSS’s procedures have caused consumer eviction histories to appear more voluminous than the actual number of cases present and have resulted in incorrect and misleading information about the number of eviction cases relating to a particular consumer. 32.
Even when grouped together, there have continued to be multiple entries for a single case, and consumer eviction histories can still appear more voluminous than the actual number of eviction cases.
Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 8 of 16
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Inaccurate Dispositions for Eviction Cases 33.
TURSS has failed to follow reasonable procedures to assure that the Eviction Proceeding Records in Tenant Screening Reports accurately reflect the true or current status of the public records, such as the final disposition of the case. 34.
In numerous instances, TURSS has provided Tenant Screening Reports with errors including Eviction Proceeding Records that do not identify a final disposition and merely indicate that an eviction case was initiated, even if a later or final disposition is available in public records. TURSS has also provided Tenant Screening Reports with Eviction Proceeding Records that have an incorrect final disposition, such as reporting a judgment for the plaintiff when a case was actually dismissed.
35.
In numerous instances, the final disposition or other update that was missing or incorrect had occurred months or years prior to the date of the Tenant Screening Report. 36.
TURSS has received numerous consumer disputes regarding the errors described in Paragraph 34 that should have alerted it to this problem. 37.
TURSS purchases the information that goes into Eviction Proceeding Records from a third-party vendor, LexisNexis Risk and Information Analytics Group, Inc. (“LexisNexis”).
38.
TURSS has not imposed specific requirements on LexisNexis regarding the accuracy and completeness of information in Eviction Proceeding Records. Indeed, TURSS’s contract with LexisNexis has provided that:
[LexisNexis] will use reasonable efforts to deliver the [LexisNexis] Services and to compile information gathered from public records used in the provision of the Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 9 of 16
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[LexisNexis] Services; provided, however, that [TURSS] accepts all information “AS IS.” [TURSS] acknowledges and agrees that [LexisNexis] obtains its data from third-party sources, which may or may not be completely thorough and accurate, and that [TURSS] shall not rely on [LexisNexis] for the accuracy or completeness of information supplied through the [LexisNexis] Services. 39.
Prior to April 2020, TURSS’s procedures allowed it to report Eviction Proceeding Records without regard to when an update on the records was last obtained from a particular source. In April 2020, TURSS implemented process changes in an attempt to reduce the number of Eviction Proceeding Records it reported with out-of-date dispositions. But TURSS only took these steps after receiving a Civil Investigative Demand from the FTC. Inaccurate Labeling of Information in Eviction Proceeding Records 40.
TURSS has failed to follow reasonable procedures to label the fields in Eviction Proceeding Records in Tenant Screening Reports to accurately describe the nature of the information populated in that field.
41.
Until at least early 2019, TURSS included a field for Eviction Proceeding Records in Tenant Screening Reports that it labeled or described as a “Judgment Amount.” 42.
However, the amounts that TURSS populated in this field were not necessarily a judgment amount awarded by a court. Instead, in many instances, TURSS used this field for amounts representing any money the plaintiff in the eviction case alleged that the consumer owed.
43.
The term “Judgment Amount” was inaccurate and misleading because it falsely represented that a court had ordered the amount due in a judgment. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 10 of 16
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44.
For example, TURSS included amounts in the “Judgment Amount” field even when there was no final disposition in an eviction case or when an eviction case was dismissed or resolved in the tenant’s favor, giving the impression that there was a final judgment of a particular amount against a tenant when there was none. 45.
In March 2019, TURSS changed the name of this field in at least some of its reports to “Amount.” However, this vague label still does not assure maximum possible accuracy because TURSS has populated this field with a variety of figures, including the amount alleged due by a landlord when the case was filed—which may or may not be owed by a consumer, a judgment amount, or the remaining amount owed by the tenant on a judgment. Reporting Sealed Records 46.
TURSS has failed to follow reasonable procedures to prevent the inclusion of sealed Eviction Proceeding Records in Tenant Screening Reports. 47.
TURSS maintains a database with Eviction Proceeding Records that are supplied by LexisNexis.
48.
According to TURSS, LexisNexis provides updates that permit TURSS to identify and delete Eviction Proceeding Records that could no longer be located, and thus may have been sealed or restricted from the public record after being supplied to TURSS. 49.
Prior to November 2021, TURSS did not have procedures to ensure that the updates from LexisNexis would allow TURSS to identify and delete all Eviction Proceeding Records in TURSS’s database that may have been sealed after being supplied to TURSS. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 11 of 16
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Specifically, the updates may not have included changes to eviction cases more than one year old if the only record was a civil new filing, even if those records were subsequently sealed. 50.
TURSS had notice no later than June 2018 that the records referenced in Paragraph 49 may not have been updated.
Results of Failure to Follow Reasonable Procedures 51.
As a result of TURSS’s failure to follow reasonable procedures to assure maximum possible accuracy, in multiple instances, TURSS has provided Consumer Reports with incorrect and misleading information regarding consumers, including current or prospective tenants.
52.
Throughout the relevant time period, TURSS has received tens of thousands of consumer disputes about the Eviction Proceeding Records in its Consumer Reports. 53.
TURSS’s failure to follow reasonable procedures to assure maximum possible accuracy of Consumer Reports caused, or was likely to cause, consumer injuries, such as prolonged housing searches, additional application fees, time and money spent correcting errors in Tenant Screening Reports, higher rental payments, temporary housing costs, and denial of housing.
Failure to Identify the Sources of Information in Consumer File Disclosures 54.
Section 609(a) of the FCRA, 15 U.S.C. § 1681g(a), generally requires Consumer Reporting Agencies to, among other things, “upon request, . . . clearly and accurately disclose to the consumer: (1) All information in the consumer’s file at the time of the request . . . [and] (2) The sources of the information . . . ” (“File Disclosure”). Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 12 of 16
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55.
This statutory requirement is important because it enables consumers to dispute an inaccuracy at the source to help prevent the reoccurrence of the inaccuracy in information that the source provides to third parties.
56.
TURSS obtains public record information, including criminal records and Eviction Proceeding Records, for inclusion in its background screening reports from multiple sources, including directly from the jurisdiction, through court-managed databases or records, and from third-party vendors.
57.
In numerous instances where TURSS obtained criminal records and Eviction Proceeding Records from third-party vendors—such as LexisNexis—TURSS failed to identify the third-party vendor as a source of the criminal record and Eviction Proceeding Record information in File Disclosures to consumers.
58.
Prior to June 2021, when a consumer requested a File Disclosure from TURSS, TURSS provided the consumer with a File Disclosure that identified the jurisdiction for the criminal record or Eviction Proceeding Record as the sole source of the information even when, in fact, TURSS obtained the information from a third-party vendor source. 59.
In June 2021, TURSS began disclosing LexisNexis as a source of Eviction Proceeding Record information. TURSS only took this step after receiving a Civil Investigative Demand from the FTC. In June 2022, TURSS began disclosing third-party criminal data vendors as sources.
60.
TURSS’s prior failure to disclose its third-party vendors as a source of criminal records and Eviction Proceeding Records was knowing and reckless. Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 13 of 16
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Count I – Violations of Section 607(b) of the FCRA 61.
As described in Paragraphs 23 through 53, and in numerous instances, Defendant TURSS has failed to follow reasonable procedures to assure maximum possible accuracy of Consumer Report information.
62.
By and through the acts and practices described in Paragraph 61, Defendant TURSS has violated Section 607(b) of the FCRA, 15 U.S.C. § 1681e(b). 63.
By and through the acts and practices described in Paragraph 11, Defendant Trans Union LLC has violated Section 607(b) of the FCRA, 15 U.S.C. § 1681e(b). Count II – Violations of Section 609(a) of the FCRA 64.
As described in Paragraphs 54 through 60, and in numerous instances, Defendant TURSS has failed to disclose the sources of information contained in a consumer’s file in response to consumers’ requests.
65.
By and through the acts and practices described in Paragraph 64, Defendant TURSS has violated Section 609(a) of the FCRA, 15 U.S.C. § 1681g(a). 66.
By and through the acts and practices described in Paragraph 11, Defendant Trans Union LLC has violated Section 609(a) of the FCRA, 15 U.S.C. § 1681g(a). PRAYER FOR RELIEF
WHEREFORE, Plaintiffs request that the Court:
a. permanently enjoin Defendants from committing future violations of the FCRA and the FTC Act;
b. impose civil money penalties against Defendants; Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 14 of 16
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c. award such monetary relief as the Court finds necessary, including but not limited to refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, and payment of damages;
d. order Defendants to pay the FTC’s and Bureau’s costs incurred in connection with proceeding with this action; and e. award additional relief as the Court determines to be just and proper.
Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 15 of 16
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Dated: October 12, 2023 Respectfully submitted, FEDERAL TRADE COMMISSION Benjamin Wiseman Associate Director Robert Schoshinski Assistant Director Tiffany George Assistant Director Whitney Moore (DC No. 496842) Jarad Brown (CA No. 294516) Attorneys Federal Trade Commission Division of Privacy and Identity Protection 600 Pennsylvania Avenue NW Mail Stop CC-6315 Washington, DC 20580 (202) 326-2645 (Moore) (202) 326-2927 (Brown) (202) 326-3392 (Fax) Email: [email protected] Email: [email protected] Attorneys for the Plaintiff Federal Trade Commission CONSUMER FINANCIAL PROTECTION BUREAU Eric Halperin Enforcement Director Richa Shyam Dasgupta Deputy Enforcement Director Susan Torres Assistant Deputy Enforcement Director Emily Sachs (VA No. 82437) Phillip Harris (NC No. 39740, AZ No. 036513) Joseph Sanders (IL No. 6308241, NY No. 4397204) Rebecca Smullin (DC No. 1017451, CA No. 250274) Enforcement Attorneys Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 (202) 435-9424 (Sachs) (202) 435-7768 (Harris) (202) 435-9642 (Sanders) (202) 435-7546 (Smullin) Email: [email protected] Email: [email protected] Email: [email protected] Email: [email protected] Attorneys for the Plaintiff Consumer Financial Protection Bureau s/Whitney Moore s/Emily Sachs Case No. 1:23-cv-02659 Document 1 filed 10/12/23 USDC Colorado pg 16 of 16