The changes in the Fair Credit Reporting Act go back about a decade when identity theft began to become more than just an occasional occurrence and more of an epidemic. An identity thief could sell hundreds or even thousands of identities in only a few hours. Hacking into business computers was always the preferred method, but information could also be obtained by breaking into small businesses, doctors’ and dentists’ office, and apartment management and landlord offices. These places were storehouses of large numbers of names, addresses, financial and credit information, and life histories or job or rental application. Even mothers’ maiden names and educational histories could be had with little effort from files at these locations. This all added up to being able to pretend to be persons with good credit, allowing them to obtain credit cards and lines of credit under the names of those persons.
So the Fair Credit Reporting Act required screening companies to validate that the end users—the doctors, dentists, employers, landlords, and property managers, would handle the information responsibly, safely, and confidentially.
The nation’s three major retail credit bureaus (Experian, TransUnion, Equifax) have instituted the necessary regulations to qualify customers who wish to purchase and/or receive retail credit reports. There is an important difference between retail credit reports and rental histories, employment histories, credit summaries, or rental recommendations. The only type of report covered by the new rules is just the Commercial Retail Credit Report.
In the year before the new rules went into effect, almost 10 million Americans were victims of identity theft, a crime that cost approximately $5 billion. The new requirements are intended to help combat credit fraud and identity fraud, and have already gone a long way in doing just that. The tenant screening industry is responsible for enforcing these new rules. Consequently, all companies that sell retail credit reports are now contractually required to qualify their own customers who seek access to these reports. The consequences for any tenant screening company not in compliance with the newly-established rules will include denial of access to retail credit reports altogether. So each link in the credit information chain has to be shown to be authentic…all the way to the end user, you.