Credit bureaus requiring home inspection to run a credit check

[Lisa]

I am a Mom and Pop property owner and belong to my local apartment association for years. They sent us all info that from now on, in order to run a credit check on a prospective resident, we must submit, and pay for, a physical inspection of our property. They will photograph our desk, our file cabinet, our shredder, and the outside of our home showing our address. This will be posted online to a secure server. I quote from the do***ents.

"Q. Does your inspection include the required digital
photos?
A. Yes, our field agents are required to take and upload
all CRA required photos, which include any signage,
secure storage areas (file cabinets), workspace only, and proper disposal method (paper shredder). All photos are kept on a secured server and access is limited to client
and authorized personnel. If you work out of a residence the field inspector is required to take an exterior photo ofyour property address. Typically, this is a photo of street number posted on the house. They do not need to take numerous photos of the interior or exterior of the home. Only those described herein."

"The onsite inspection is simple and painless. The third party inspection company, Trendsource, will call you to set up an appointment to come to your home or office and verify that you are keeping all credit reports in a locked file cabinet, and/or in a password protected computer. You must also have a method of destroying credit reports that are printed, such as shredding. The company will take a picture of your desk area and the outside of your home to insure that your work space is secure and separate from the rest of your home. The purpose of this inspection is to help prevent identity theft. We are confident that all of our members will pass this inspection. We implemented these procedures for all new customers after December 15, 2007 and everyone has passed to date."

Is this legal? I contacted the FTC, and they say no such requirement is in the FCRA. Section 607 of the act does not mention a physical inspection, and to say it does is reading way more into it than exists. It appears to just be something the CRA's are doing, but I don't know how they can get away with this. And I have found nothing online or in the media to indicate people are even aware of this gross invasion of privacy

How do I go about fighting this? Any ideas, suggestions?

Thank you very much for any help.

[masterduke]

I wonder if this is some 'new' way that the banks, lenders, CRA's are trying to show that they are now fiscally responsible? Now that their collective greed has destroyed the entire real estate industry. as well as peoples living standard. So of course rather than any of them being pinned for their atrocities, they lateral it back on to the small buisness person/consumer with new rules to comply with? It sure sounds fishy? I haven't read any news stories covering this topic either? This was concerning you being a legitmate land lord? What about contacting a local T.V. News department and ask them to investigate? If they have one of those 'troubleshooter reporters' maybe they would want to look into this topic? Please let this forum know any information you uncover.

[Lisa]

Thanks for the support and suggestion.

Yes, I am a legitimate landlord, I own one condo that I bought before I was married and we kept it as an investment.

In order to run a credit check on a prospective resident, we have to belong to our local apt assn, which has a contract with a company that has access to the credit bureaus, as they don't do business with small time owners. We have to be pre-approved, prove who we are, and of course have to have the applicants' written permission. Since when isn't driver's license, SS# and all the other requirements we must meet constitute adequate proof of who we are? Now they require a home inspection with digital photos? What's next, our DNA?

If I don't submit to this, they will only allow us limited info on the applicant, and that seriously jeopardizes my ability to make an appropriate and informed decision as to whether to accept the person or not.

I have just contacted 2 local tv stations, as I feel people need to know about this gross invasion of privacy because it sets a dangerous precedent.

[Extramural]

Lisa,If I were in your shoes, and I wanted an easy solution, I might just have a Notary be on call for me, and pay the Notary out of the application fee, and then contact the three major CRA's myself, after obtaining the applicant's Notarized signature on the authorization for me to run a credit/background check.

The taking pictures thing is only benefiting the company that you are getting CR's from, unless you feel that an invasion of privacy is a benefit.

That is not the only company that does background and credit checks.

Search online.

[trooper2ls]

As a systems programmer for 2 decades I have developed software for 2 out of the 3 CRA companies.

A BIG (HUGE) problem today is identity theft. There are offshore crime rings that do nothing but steal people's identities and commit fraud with the information. One such method is obtaining a few pieces of information and then pulling a credit file on that person. There were several cases pending against the 2 bureaus that I did work for in connection with a litigant sueing the CRA for being the weak link by just allowing anyone to obtain records from their system... with no verificaion necessary.

A CRA is in the business of selling information for profit, period. Recent publicity and recognition of identity theft being a "real" crime has put the heat on the agencies and possibly these new policies are a result of some judments against them by litigants who sued successfully.

As a landlord your main concern is if someone is going to pay their rent on-time. Just because someone has a good credit score doesn't mean that they will. For instance if you ran a credit check on me.. it will come back with "no information found" ... does that mean I'm a bad risk? Not necessarily. I choose not to utilize credit and have lived that way for over 10 years and the accounts that I used to have have long expired from reporting.

Additionally the CRA's generally do not have accurate public records information due to the fact that SSN's being the traditional link between a person and their credit file is not on court do***ents due to privacy issues... including bankruptcies.

Possibly you could try another approach. A background check is simple and in-expensive from

http://www.intelius.com/

Also have the potential applicant give references of previous landlords .. and follow up on them. A simple phone call to a previous landlord with the question .. "Did John Doe rent from you from xx to xx? And were there any issues?" I'm sure a fellow landlord would give you a better indication than a CRA.

Good luck.

..J

I now leave you with the following news story about a man who had a very high credit score and was never late on his rent.

-----

Got beer???? ... A landlord's nightmare.


A SINGLE GUY LIVED IN THIS TOWNHOUSE FOR 8 YEARS IN OGDEN UTAH, USA .THE LANDLORD THOUGHT HE WAS THE BEST RENTER BECAUSE HE NEVER CALLED OR COMPLAINED AND WAS NEVER LATE ON A PAYMENT.

THESE PICTURES DON'T EVEN COME CLOSE TO WHAT IT REALLY LOOKED LIKE.

CENTURY 21 REALTY HAD ALREADY MOVED SOME OF THE CANS OUT, AND THEY HAD CAVED IN THE TUNNELS THAT THE RENTER HAD MADE TO GET TO THE BEDROOM, BATHROOM, AND KITCHEN .

All this, yet you still do not see any dust, scattered clothing, or dirty dishes anywhere.

Other than having a minor drinking problem, he was basically a very clean, organized person. Add to this, the fact that he was concerned about his health, proven by the fact that he drank 'Light' beer.

Beer cans by the tens of thousands. Mountains of cans burying the furniture. The water and heat were shut off, apparently on purpose by the tenant, who evidently drank Coors Light beer exclusively for the eight years he lived there.

There was an estimated 70,000 beer cans in the townhouse. To ac***ulate that amount of cans, the resident must have consumed an average of 24 beers a day for the 8 years of his tenancy!!

[amenmesse]

Originally Posted by trooper2ls

Got beer???? ... A landlord's nightmare.


A SINGLE GUY LIVED IN THIS TOWNHOUSE FOR 8 YEARS IN OGDEN UTAH, USA .THE LANDLORD THOUGHT HE WAS THE BEST RENTER BECAUSE HE NEVER CALLED OR COMPLAINED AND WAS NEVER LATE ON A PAYMENT.

THESE PICTURES DON'T EVEN COME CLOSE TO WHAT IT REALLY LOOKED LIKE.

CENTURY 21 REALTY HAD ALREADY MOVED SOME OF THE CANS OUT, AND THEY HAD CAVED IN THE TUNNELS THAT THE RENTER HAD MADE TO GET TO THE BEDROOM, BATHROOM, AND KITCHEN .

All this, yet you still do not see any dust, scattered clothing, or dirty dishes anywhere.

Other than having a minor drinking problem, he was basically a very clean, organized person. Add to this, the fact that he was concerned about his health, proven by the fact that he drank 'Light' beer.

Beer cans by the tens of thousands. Mountains of cans burying the furniture. The water and heat were shut off, apparently on purpose by the tenant, who evidently drank Coors Light beer exclusively for the eight years he lived there.

There was an estimated 70,000 beer cans in the townhouse. To ac***ulate that amount of cans, the resident must have consumed an average of 24 beers a day for the 8 years of his tenancy!!

He didn't trust gubment and was saving for retirement when he would rent a truck and make one trip to the recycle plant. My opinion anyways lol.

[Lisa]

QUOTE]There were several cases pending against the 2 bureaus that I did work for in connection with a litigant sueing the CRA for being the weak link by just allowing anyone to obtain records from their system... with no verificaion necessary.
[/quote]

Not requiring verification is careless, as anyone doing legitimate business, such as I, can prove who we are. I welcome that. I just think coming into my home and photographing my work area, and putting those photos, along with my address, online is going waaaay overboard, is an invasion of privacy, and is putting MY identity at risk. And for the CRAs to just decide on their own that they can do this seems illegal.

I do check with previous landlords, and now most are too afraid to say much at all because they are afraid to violate privacy laws.

True, having no credit doesn't make one a bad risk, as we have accepted young people who are just starting out. But we have turned down people with terrible credit because if you are almost $30,000 in debt, and the report shows you don't pay those bills, chances are you won't pay the rent, either. Maybe you will, but we can't take that risk. And having that credit check is just one more tool we can have to make an informed decision. I will check out your link,
http://www.intelius.com/

Extramural, I have contacted the CRAs, but they only operate in quantity.

I appreciate all your valuable suggestions, and as for the beer cans, well, I'm just glad it wasn't my condo. The only time we had a horror story was when we had sold a condo, and 5 years later had to take it back thru foreclosure. I would have preferred the beer cans over what we had to clean up. Kilz saved what was left of the property.

[trooper2ls]

At least 70,000 aluminum cans would have fetched $3500 in deposit returns in New York.

Good luck on your issue with the CRA. As far as their requirements go... did they specifically ask if you were a home based business? Or is this a policy that they have for all new customers?

Possibly a discrimination lawsuit hidden somewhere down in the statutes of your state if they treat a home business differently than a commercial office space one.

I don't see how a small business can be deemed a higher risk than a large one. A number of years back the State of Georgia was the leak for ID thieves because of sloppy handing of returned DL's. They were supposed to be shredded in a special machine but due to sloppy handing criminals were picking them up outside the door to the facilities. The local news did a story where they brought cameras behind the shreadding facility and showed whole licenses just laying on the ground... then the contacted and interviewed the people's licenses that they found.. needless to say it raised a huge stink.

I do some programming work for a cabinent sales company that does over 2M a year... and he runs it out of a spare bedroom.

The modern industrial society is becoming more and more difficult to do business with as incompetent corporate America gains more lawless power.

..J

[courttroubles]

Quite honestly I'm surprised their allowing you to do anything at all from home. I know a couple of years ago I contemplated opening my own collection agency. As I've been told I can't pull such items from home.

Possibly should of done it the office space I was going to rent was only $180 per month. And yes they'd want to verify things with the landlord and such. But since everything is done online you could still not have to go into the office. Do you have anyone you can use that you trust to say is your landlord? Maybe this would be better way to go. As it should be a commercial address.

Not sure if this helps. But good luck!

Kathy

[Lisa]

Originally Posted by trooper2ls

Good luck on your issue with the CRA. As far as their requirements go... did they specifically ask if you were a home based business? Or is this a policy that they have for all new customers?

Possibly a discrimination lawsuit hidden somewhere down in the statutes of your state if they treat a home business differently than a commercial office space one.

..J

I believe they are requiring all rental property owners to submit to these inspections, the differences being if you are a large property owner, you probably have an on site office, and that is what would be photographed and inspected, not your work space in your private home.

Where a discrimination suit would come into play would be if only landlords are being required to be photographed and inspected, and not any other home based businesses.

Trooper, does your cabinet sales friend have to run credit checks, and has he had to do this inspection thing yet?