- Case
- United States v. AppFolio, Inc.
- Source
- U.S. District Court for the District of Columbia (FTC action filed by the Department of Justice)
- Citation
- No. 1:20-cv-03563 (D.D.C. filed Dec. 8, 2020)
- Decided
- December 8, 2020
- Bottom line
- A tenant screening company cannot simply pass along a vendor's criminal or eviction records; it must have its own reasonable procedures to make sure the records are accurate and belong to you.
Background
Tenant screening reports are consumer reports under the FCRA. Landlords and property managers use them to decide who gets an apartment, and they often include criminal records and eviction filings pulled from court databases. Two FCRA rules matter most here. Section 1681e(b) requires a consumer reporting agency to “follow reasonable procedures to assure maximum possible accuracy” of its reports. Section 1681c(a) generally bars reporting civil suits and judgments, and arrest records, that are more than seven years old. Criminal convictions are not subject to that seven-year limit.
AppFolio, based in Goleta, California, furnishes tenant screening reports to thousands of property management companies. According to the complaint, AppFolio did not gather court records itself. It bought criminal and eviction records from a vendor, CoreLogic, and was a “Reseller” under the FCRA.
The complaint alleged that AppFolio generally relied on the vendor’s procedures for matching applicants to court records, even though it “had limited knowledge” of those procedures. Its contract with the vendor acknowledged that records could appear to match an applicant but belong to someone else, and the vendor disclaimed any guarantee of accuracy.
What the order requires
On December 8, 2020, the Department of Justice filed a complaint and a proposed stipulated order on behalf of the Federal Trade Commission in federal court in Washington, D.C. The complaint alleged two FCRA counts:
- Obsolete information (§ 1681c(a)). Until at least June 2019, AppFolio in multiple instances reported eviction records and non-conviction criminal records more than seven years old.
- Reasonable procedures (§ 1681e(b)). Until at least April 2019, AppFolio allegedly failed to follow reasonable procedures to check whether the identifiers in a record reasonably matched the applicant, to catch results that clearly mixed information about multiple people, to report dispositions and offense details accurately, and to prevent duplicate entries for the same case.
According to the FTC, the resulting errors included records for people with different names or birthdates, missing or wrong dispositions, and duplicate entries, and some applicants may have been denied housing as a result.
Under the settlement, AppFolio agreed to pay a $4.25 million civil penalty. The order bars it from reporting non-conviction criminal or eviction records older than seven years and requires it to maintain reasonable procedures to assure maximum possible accuracy. The Commission voted 4-1 to authorize the Justice Department to file the complaint and order. Commissioner Rohit Chopra dissented, and Commissioner Rebecca Kelly Slaughter issued a concurring statement.
“Consumers face enough hurdles in obtaining housing without the additional burden of inaccurate background checks,” said Andrew Smith, then director of the FTC’s Bureau of Consumer Protection.
Our take
The core message of AppFolio is one consumer advocates have pressed for years: a screening company is responsible for what it sells. Buying records from a large vendor and passing them along under a contract that disclaims accuracy is not a procedure “to assure maximum possible accuracy.” The complaint’s description of the problems, including mismatched names and birthdates and the same case listed more than once, describes the most common tenant screening errors we see.
To be fair to AppFolio, these were allegations resolved by settlement, not findings after a trial, and the complaint described conduct that ran until 2019. A civil penalty is also paid to the government, not to the renters who were affected. Individual consumers harmed by inaccurate screening reports still need to use the FCRA’s private right of action to recover their own losses.
What it means if your report is wrong
If you were turned down for an apartment because of a screening report, the landlord must give you an adverse action notice naming the company that supplied the report. You are entitled to a free copy of that report. Check every criminal and eviction entry: is it really you, is the disposition right, is it listed twice, and is it a non-conviction or eviction record more than seven years old? Dispute errors in writing with the screening company and keep copies. A free case review can help you decide what to do next, and there is no fee unless we win.
Sources
Primary
- FTC press release (Dec. 8, 2020)
- Complaint, United States v. AppFolio, Inc. (D.D.C.)
- FTC case page — AppFolio, Inc.
Commentary we reviewed
Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.