Consumer Advocates Applaud CFPB Action on Background Screening

Move Comes after Advocates Highlighted Ongoing Consumer Challenges

Andy Spears

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Consumer advocates are cheering a move by the Consumer Financial Protection Bureau (CFPB) that would shield consumers from the negative impacts of incomplete or inaccurate background screening reports. The move comes just days after U.S. Sen. Sherrod Brown raised the issue in a letter to the CFPB.

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“Too many people are denied jobs and housing due to shoddy and inadequate matching practices by background screening companies,” said Ariel Nelson, staff attorney at the National Consumer Law Center. “Today’s advisory opinion makes crystal clear that companies that sloppily attribute the wrong information to a prospective tenant or employee are breaking the law.”

The advisory opinion affirms that consumer reporting agencies, including tenant and employment screening companies, violate the Fair Credit Reporting Act if they use name-only matching or other insufficient matching procedures to match information to a consumer.

“This is a game changer,” noted Chi Chi Wu, staff attorney at the National Consumer Law Center. “Today’s strong action by the CFPB will lead to increased accountability, better accuracy, and fewer consumers being denied jobs and housing.”

In his letter to the CFPB, Brown noted:

“For families that live paycheck to paycheck, being denied housing as a result of a screening report’s inaccuracies could strain much needed resources and deplete a household’s savings. Inaccuracies can also limit the number of applications a household can reasonably afford to submit, and may prevent households from securing safe, decent, and conveniently-located affordable housing.”

The CFPB action means that consumers will have recourse and that background screening companies will be encouraged to provide a more complete and accurate picture of consumers before issuing reports.

Photo by Romain Dancre on Unsplash

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .