Hi Jeffrey,

I have questions on the Certificate for Authorized Use document I had to sign last night before running a credit report. It stated having me provide the free report if requested and having me provide a free report before taking adverse action. This is new and a few of us that use your service have questions. If you could explain the changes or point us to where in the Fair Credit Reporting Act it explains these changes to make sure we comply, that would be helpful. Thank you!

Not Jeffery but I might be able to shed some light on this -

FCRA requires the issue of a free credit report if adverse action is taken along with notice from the person telling the applicant how to get the free report. A sample of these letters will be cut and pasted on the next posting. Adverse action can be anything from saying additional deposit is required to a flat out denial based on the credit report. This is not required if the application was DQ based none credit issues.

Where I can't answer your question, I can provide that sample adverse action letter. With the company that I use, the credit reporting agency provides that report. It sounds like AOA might be shifting that from the agency to the end user.

Notice of Adverse Action

Landlord:

Name of Applicant:

We have completed a review of your rental application. Unfortunately, based on the information currently in

your files, your application has not been approved for the requested terms, for the following reason(s):

Credit application incomplete

Unable to verify residence

Insufficient type of credit references provided

No credit file or limited credit experience

Unacceptable type of credit references provided

Delinquent past or present credit obligations

Unable to verify credit references

Collection action or judgment

Temporary or irregular employment Garnishment or attachment

Unable to verify employment Bankruptcy, foreclosure or repossession

Length of employment Length of residence or temporary residence

Income insufficient for amount of credit requested

Number of recent inquiries on credit bureau report

Excessive obligations in relation to income

Value or type of collateral not sufficient

Unable to verify income Other:

Our credit decision was based in whole or in part on the information obtained in a report from the consumer

reporting agency listed below. You have the right under the Fair Credit Reporting Act to know the information

contained in your credit file at the consumer reporting agency. In addition, if you find that any information

contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons

why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency,

if you request it no later than 60 days after you receive this notice.

TransUnion Consumer Relations, P.O. Box 2000, Chester, PA, 19022-2000, (800) 916-8800

TransUnion Rental Screening Solutions, 5889 S. Greenwood Plaza Bl. #201, Greenwood Village, CO 80111, 800-568-5665

We also obtained your credit score from this consumer reporting agency and used it in making our credit

decision. Your credit score is a number that reflects the information in your consumer report. Your credit score

can change, depending on how the information in your consumer report changes.

Your credit score was _______. Scores range from a low of 350 to a high of 850.

Key factors that adversely affected your credit score:

Notice: The Federal Equal Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part

of the applicant’s income derives from any public assistance program: or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is: Federal

Trade Commission Consumer Response Center FCRA Wash., DC 20580 877-382-4357

Ray-N-Pa: We are aware of that. Please see the "MrLL Credit Report" thread on this also. The credit reporting site makes it sound like something has changed, but we can't seem to find any reference to it.

WMH: In the past, when we've ALL had a question about the credit reporting company promoted by Jeffrey that is linked on this site, he has gotten in touch with them to confirm things -- so that we don't have 20 of us calling to ask the same thing.

For example, long ago, it was a question to confirm that they were doing a Hard Pull and not a soft one (which was the case). Later, they changed this to be a Soft Pull. In both cases, Jeffrey was the one to let us know.

So, in this case, we are curious why the company has this new wording about giving a copy of the report to the applicant when, as far as we can tell, no federal law has changed, so there is nothing new to interpret...

It's reasonable for us to ask Jeffrey based on history. If he doesn't know and would prefer we each ask directly, then we can do that. I just thought it better to ask him first.

I've read it and, you're right, that isn't what it says. It says this:

"The User agrees to make available a free copy of the report if requested by the Subject, and must automatically provide a free copy of the report to the Subject if information in the report may be considered as grounds for denial of tenancy or employment, before taking adverse action."

We're "The User" in this case. It says that WE must make available a free copy of the report if requested -- and that WE must "automatically provide" it to them before denying based on something in the report.

If they mean that it allows THEM as the report PROVIDER to give them a copy if requested after we send just the Adverse Action letter, then they need to re-word that.

I won't sign it as it is currently written. We've been told for years that we're not ALLOWED to give the applicant a copy of this report. I'm certainly not going to sign something that says to do so while, at the same time, someone is verbally telling me to ignore that and just do what we've always done...

I've left a message myself to try to clear this up.

Just wanted to check in on this to see if there were any updates? Have we heard anything yet?

Thanks!

Here is what was conveyed to me:

The tenant screening company confirmed that federal law can be interpreted to require landlords to share a full credit report with an applicant if requested. Additionally, when adverse action is taken based on the background check, landlords must automatically provide the applicant with the complete credit report. With increasing lawsuits targeting landlords, the screening company aims to stay well ahead of FCRA compliance compared to other services.

Yeah, that just seems really weird. As far as I can tell, nothing has changed in years with the FCRA. So why this suddenly new interpretation?

Also, the FTC even provides direct guidance to landlords on how to handle this:

www.ftc.gov/business-guidance/resources/using-consumer-reports-what-landlords-need-know

Their recommendations are exactly how they have always been: give them notice of the adverse action with information on how they can get their own report to check for errors.

I can't find ANY other source on the internet saying that a copy of the report needs to be given to the applicant when you take an adverse action. (And, again, this company is saying that we give it to them BEFORE the adverse action occurs somehow -- which doesn't even make sense. Basically hand it to them as we're telling them "Sorry, you didn't qualify"? Or do we mail it to them with a denial letter or something?)

There is "staying well ahead of FCRA compliance" and then there is "adding weird requirements that aren't part of the FCRA at all."

In any case, please keep us informed of what this lawyer says. Again, just seems so odd that I can't find anyone else online recommending that credit reports be handled in this way. What changed to trigger this company to do it differently than anyone else? I'm very curious what has changed recently in the standard interpretation of the FCRA.

Like I said, I won't sign it as written. Hopefully I don't need a report before this is resolved.

Thanks.

I kept after the powers to be (of the tenant screening service featured on this site) regarding the proposed requirement that landlords agree to automatically furnish a copy the credit report to applicants. After some back and forth, (and knowing what the actual federal requirements are), I got the service NOT to make it a requirement of landlords that they must agree to automatically provide applicants with a copy of the complete credit report.

However, I do understand their concern in wanting to protect landlords from potential liability. Their position was that the report must be provided if requested by the applicant and they claim any of the following:

1. When a consumer has received an adverse action notice (§ 612(b)).

2. When a consumer is unemployed and intends to apply for employment within 60 days (§ 612(c)(1)).

3. When a consumer is a recipient of public welfare assistance (§ 612(c)(2)).

4. When a consumer has reason to believe their file contains inaccurate information due to fraud (§ 612(c)(3)).

5. When a consumer has placed a fraud alert on their file (§ 612(d)).

If the applicant does not fall into of the above categories, then no automatic credit report is required by landlords. Again, just understand that if you do not provide the report upon request and they fall under one of the above categories, you are risking possible liability for not providing it. The screening service was concerned that landlords may not know or ask all the right questions to make sure that they don't need to give it to the applicant, to avoid potential liability, and thought best practice would be just to give it to all applicants.

This still makes no sense. Of course we wouldn't have to give it to them if we ACCEPTED them. But if we DENY them based on anything in the report, then we MUST provide the Adverse Action letter! Therefore, this still means that for anyone that we deny, we have to give them a copy of their own report if they ask for it? Is that correct?

Also, this wording is still what is troubling that you say will still be included:

"and must provide a free copy of the report to the Applicant when requested if information in the report may be considered as grounds for denial of tenancy or employment, BEFORE taking adverse action."

So, that says that if I'm going to deny someone, then I have to give them a copy before I do so?? It makes no sense. And how would an applicant request a copy of the information BEFORE any adverse action is taken? They ask when they apply and go "Hey, just so you know, if you're going to deny me for anyone on my report, then I need a copy of it FIRST before you actually take the adverse action and deny me."

Again, that makes no logical sense.

My plan - I will continue to send the adverse action letter as I always have when someone is denied due to info on their report - no big deal. If they then ask me for a copy of the report, I will provide the Consumer Version that is now available. Otherwise, I do not plan to provide the report - they can order it themselves from the info provided in the AA letter. Or, if someone is not approved due to public records info or something else not in the report, I will provide the same info I always have.

John, while I tend to agree with you that this makes no sense, this is really a big fat nothing-burger, to use one of your phrases. If someone asks for the report, give them a copy, if they don't, then don't. It's no big deal. Based on the info we now have, we are clearly allowed to do so.

Still, you asked how do I handle it. I understand you have concerns with this, but to be honest, this is something that is taking up very little space in my head. Here's why.

1. Even though I pull a credit report on all prospective applicants (who get past my pre-screening), while the credit report offers a lot of insight regarding the applicant that I may not know otherwise, I always look for a clear reason from "public" information or right from their application (not related to the credit report) to decline someone. For example, a reason related to income, rental history, etc. So to be honest I rarely ever turn some one down because of the credit report. So this whole concern becomes a mute point for me.

I'd be happy to give it to them, if anyone asked, if I ever made the decision because of their credit report.

But my question was I was told that it was ILLEGAL to give it to them and they had to pull their own.

I'd be happy to give it to them, if anyone asked, if I ever made the decision because of their credit report.

But my question was I was told that it was ILLEGAL to give it to them and they had to pull their own.

WMH, maybe an urban myth:) I thought that was the case as well.

However, now I'm trying to find the actual source of where it says it is illegal to show denied applicants the credit report.

Just Tim: I agree that the NEW version of what they want us to agree to isn't as bad. Note that it wasn't a "nothing-burger" originally. The original text they wanted us to agree to said:

"must automatically provide a free copy of the report to the Subject if information in the report may be considered as grounds for denial of tenancy or employment, before taking adverse action"

They didn't have to ASK for anything. It said that we HAD to provide it automatically if we take an adverse action (i.e. deny them) because of it. And, not only that, it said that we had to give it to them BEFORE we deny them!

That seemed a bit crazy to me.

The new version is reasonable/doable, at least.