An alarming number of tenant background checks are turning up inaccurate or outdated data, putting both renters and landlords in precarious situations. A recent study reveals that traditional screening services regularly miss or misreport crucial information, leading to unjust housing denials, potential safety risks, and legal exposure for landlords. The industry is now under pressure to reform outdated systems and adopt more reliable screening tools.
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Hidden Flaws in Reports
Tenant screening, often viewed as a simple formality, is riddled with unseen inaccuracies. Behind the polished PDF reports lies a flawed system. According to a Rent Butter study, 1 in 7 traditional background checks includes missing or incorrect data. In just 30 days, outdated systems missed six registered sex offenders, 85 felony convictions, and 34 misdemeanors among approved applicants.
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Real People Harmed
These inaccuracies have real-world consequences. In a 2020 investigation by The New York Times, applicants Glenn Patrick Thomas Sr. and his son were denied housing and left homeless after being wrongly linked to an eviction record belonging to someone else. “In fact, the eviction was for Patricia Thompson, who was not related to them.” Tenants typically pay $30 to $75 for these reports, only to suffer from errors they can rarely dispute in time to save their application.
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No Control for Landlords
Landlords, too, are at the mercy of these flawed systems. They often rely on third-party services, receiving reports without any opportunity to verify the underlying data. This dependence has led to legal troubles. NBC News reported lawsuits where private landlords were accused of discrimination due to false reports of evictions and criminal histories. “Two large private-equity-backed landlords discriminated against prospective tenants by relying on screening systems reporting inaccurate information.”
Legal Risks Mounting
The Washington D.C. housing authority is among those facing lawsuits. The tenant screening company it contracted is accused of confusing individuals with similar names and providing outdated or unrelated court records. “These reports contained information seven years or older, violating the Fair Credit Reporting Act’s (FCRA) provisions.” Even landlords who delegate screening to a housing authority are not shielded from liability.
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Financial Fallout and Vacancies
Every inaccurate report can cost landlords. Rejecting a qualified tenant due to false data or accepting a problematic one can lead to financial loss, legal fees, and reputation damage. For example, if a $2,000/month rental sits empty, that’s $65 lost per day, or $900 over two weeks. Misreporting risks like sex offender status in a family neighborhood can be catastrophic.
Also read: Tenant Screening Industry Faces Scrutiny Over Errors, Discrimination Against Renters
What Reports Include
Tenant screening typically includes credit history, criminal background, and eviction records:
- Credit data: credit score, debt levels, bankruptcies, delinquencies
- Criminal history: offense type, court outcomes, sex offender registry
- Eviction records: filing dates, case outcomes, judgments
However, these categories often contain outdated or legally restricted information.
Why Errors Happen
Inaccuracies stem from outdated algorithms, wildcard name matching, and slow data updates. In one case, Terrence Enright was denied housing after being wrongly linked to evictions under “Teri Enwright” due to an algorithm searching for “Enright, Ter*.” Laws in places like California and Chicago also prohibit using certain past offenses, making the presence of such data not only wrong but also unlawful.
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