FTC Settlement Over Tenant Screening Algorithm Lacks Safeguards, Redress for Victims

December 8, 2020

The Federal Trade Commission has reached a settlement with AppFolio which requires the company to fix its faulty and unlawful tenant screening algorithm—but which fails to compensate victims and lacks adequate safeguards to ensure AppFolio’s compliance. AppFolio included inaccurate information in tenant background reports in violation of the Fair Credit Reporting Act, which “directly resulted in qualified tenants being turned away from potential homes.” The settlement requires AppFolio to pay a $4.25 million fine, comply with FCRA in the future, and submit regular compliance paperwork to the FTC. But Commissioner Rohit Chopra dissented, arguing that the Commission should provide victims redress, impose stronger accountability measures, and refer the case to the Justice Department over possible housing discrimination. “Sloppy, inaccurate credit reporting practices are not mild inconveniences for American families,” Chopra wrote. “They can be deeply harmful, reinforcing discrimination and foreclosing opportunities for individuals to seek a better home, job, and life.” In February 2020, EPIC filed a complaint against Airbnb asking the FTC to investigate whether the company’s customer screening algorithm violates the Fair Credit Reporting Act.

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