After the U.S. Federal Trade Commission accused tenant screening company RealPage of falsely linking some prospective renters to criminal records, the company has agreed to shell out $3 million in a penalty settlement.

The FTC accused RealPage of violating the Fair Credit Reporting Act by improperly screening the background information of tenants applying for apartments. The company, which is based in Richardson, Texas and was founded in 1998, counts tenant screenings and an online payment tool among the various services it offers rental property managers.

The government organization claims that, between January 2012 and September 2017, RealPage could have incorrectly linked prospective tenants to criminal records. At the time, RealPage’s automated system built screening reports using exact spellings of an applicant’s last name but non-exact spellings of their first and middle names. (It moved to a new matching technology in September 2017.)

As a result, someone named Mark Smith could have potentially turned up as a Marc Smith and been linked to somebody else’s criminal record.

RealPage denied the allegations put forth by the FTC by claiming that the FTC focused on only a “minuscule fraction” of its screening results. It further added that this type of “soft-matching” is a common problem across the industry, from which multiple companies are trying to move away.

Still, the company has agreed to pay $3 million in order to settle the case.

“We were disappointed that the FTC singled out RealPage for an issue that has confronted the entire screening industry, namely how to match applicants with common last names to public records when most courts do not make social security or driver’s license numbers available as part of those records,” RealPage said in a statement. “While we disagree with the FTC’s assertions, we agreed to settle this matter in order to avoid the expense and distraction of litigation.”

RealPage further claimed that the FTC could not point to any tenant who has actually been incorrectly linked to criminal record. The $3 million fine is, according to the FTC, the highest settlement ever reached with a screening company.

“You shouldn’t get turned down for an apartment because someone has the wrong information about you,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a statement. “This case shows that, especially with today’s tight rental market, we will hold tenant screening companies responsible for the accuracy of their reports.”

Email Veronika Bondarenko

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