Background Check Errors and the Renters Who Pay the Price
A 2026 FCRA class action against Checkr and the FTC's $4.25M Appfolio settlement document how inaccurate screening reports deny housing.
Tenant screening happens fast. A landlord receives several applications, pays a background check company to run reports, and makes a decision, often within 24 to 72 hours. By the time an applicant discovers their report contained someone else’s criminal record, the apartment is already gone. That’s the structural problem at the center of a January 2026 class action lawsuit against Checkr, one of the largest background check companies in the United States, and it’s the same problem that led the Federal Trade Commission to pursue Appfolio, one of the largest tenant screening software providers, for accuracy failures back in 2020.
What happened with Checkr
The lawsuit, Davis v. Checkr Inc., Case No. 0:26-cv-60088, was filed in the U.S. District Court for the Southern District of Florida in January 2026. The plaintiff, Natasha Davis, alleges that Checkr attributed criminal records belonging to another person to her consumer report. The records weren’t hers. Checkr included them anyway, according to the complaint, because the company failed to use sufficient identifying information when matching criminal records to individual profiles.
The Fair Credit Reporting Act is specific about what consumer reporting agencies owe the people whose information they compile: they must “follow reasonable procedures to assure maximum possible accuracy” of the information in their reports. Davis’s lawsuit argues that Checkr’s procedures fell short of that standard, and that the company’s matching practices produced this kind of error systematically, not just in her case. She’s seeking class certification to extend the claims to others in the same position.
Checkr processes approximately 1.5 million background checks per month, according to figures cited in FCRA litigation filings. The company serves both employers and landlords, and offers a dedicated tenant screening product alongside its employment background check services. At that volume, even a low error rate translates to a substantial number of people receiving reports with incorrect information.
The case is in early stages. Checkr will have the opportunity to dispute the allegations, and class certification is a significant hurdle. But the underlying claim, that background check companies match records to people using identifiers that aren’t specific enough to prevent misattribution, isn’t new. It’s been documented in litigation against multiple background check companies over the past decade.
The Appfolio precedent
Appfolio reached a $4.25 million settlement with the FTC in December 2020 over exactly this kind of accuracy failure. The FTC alleged that Appfolio violated the FCRA by issuing tenant screening reports that included criminal records belonging to different individuals, eviction records older than seven years (which the FCRA generally prohibits in tenant screening contexts), and records with missing or incorrect disposition information. The FTC’s complaint noted that Appfolio had failed to implement reasonable procedures to verify the accuracy of the records it received from third-party data vendors before incorporating them into consumer reports.
Earlier, a private class action against Appfolio reached a $4.5 million settlement approved in July 2019 by Judge Robert Bryan in the Western District of Washington. That case centered on plaintiff Anthony Leo, whose background check contained an eviction record that belonged to a different person. He was denied housing as a result.
The FTC settlement offered no direct compensation to the consumers who were harmed. The $4.25 million went to the U.S. Treasury. Appfolio was required to comply with the FCRA going forward and submit periodic compliance reports to the agency, but people who lost housing opportunities because of inaccurate Appfolio reports didn’t receive anything from that proceeding. The National Law Review noted this in its coverage of the settlement, pointing out the gap between regulatory enforcement and consumer remediation in FCRA cases.
Why errors happen and why they persist
The matching problem is fundamental to how large-scale background check services work. Companies like Checkr and Appfolio aggregate criminal and eviction records from court databases, counties, and third-party data vendors across the country. Those underlying databases are uneven in quality. Some jurisdictions maintain detailed records with full identifying information. Others have incomplete records where a name and partial date of birth are all that’s available for a given criminal history entry.
When a background check company receives a query for a tenant or applicant named, say, “John Smith,” it searches across those databases for records associated with that name. If the underlying record has limited identifying information, the company has to decide whether to include it or exclude it. Including records that might not belong to the subject creates the kind of error Davis describes. Excluding any record that isn’t perfectly matched risks omitting information a landlord might want.
The financial incentives don’t automatically push toward accuracy. Background check companies compete on speed and price. A report delivered in two hours at low cost is more attractive to a landlord than one that takes a day and costs more because the company spent time verifying identifiers. The market pressure favors throughput over caution, and the person who bears the cost of an error is the applicant, not the company that produced the report.
The Consumer Financial Protection Bureau documented this dynamic in a 2022 consumer snapshot on tenant background checks, finding that consumers were often unaware they had a background check until they received a housing denial, that many didn’t know which company had produced the report, and that errors in the underlying court and eviction databases used by screening companies flowed through to reports without adequate verification at the consumer reporting agency level.
What the FCRA actually gives you
The FCRA provides real rights, though they’re most useful when you know how to use them before a housing application is in flight.
If you’re denied housing (or employment) based on a background check, the company making the decision is required to tell you which consumer reporting agency provided the adverse information and to give you a free copy of that report. You have 60 days to request the report and the right to dispute any inaccurate information directly with the reporting agency. Once you file a dispute, the agency has 30 days to investigate and either correct the record or explain why it disagrees.
That timeline matters. A housing denial that arrives on a Thursday, a dispute filed the following Monday, and a corrected report three weeks later doesn’t help you if you needed housing last week. The FCRA process is built around correction, not prevention, and it assumes that the consumer has time and information that often isn’t available during a live housing search.
Before you’re in that position, you can proactively request your tenant screening report from companies like Checkr. You can also run a search on your own name through major public records sources to see what’s out there and whether anything is misattributed. Knowing your own record before a landlord runs a check gives you time to dispute errors without the pressure of a pending application.
If you’ve already been denied and you believe the report was inaccurate, put your dispute in writing, document every step, and confirm receipt. If the agency doesn’t respond within the required timeframe, or fails to correct a confirmed error, that failure is itself an FCRA violation that a consumer protection attorney can pursue.
The rental application as a data collection event
A housing application involves submitting some of your most sensitive information: your Social Security number for the background check, income documents and pay stubs, bank statements, prior rental history with landlord contact information. The combination amounts to a comprehensive personal financial profile.
That profile passes through the landlord’s chosen screening platform, which may or may not be Checkr or Appfolio. It’s worth knowing which platform your prospective landlord uses before you apply, so you can understand how that company handles your data and whether you have the right to dispute anything in your report. Some landlords use multiple services, including separate credit bureaus and tenant-specific screening companies. Each is governed by the FCRA if they meet the definition of a consumer reporting agency.
For the documents in the rental process that you sign rather than submit for screening, handling them through a tool that processes locally is one way to avoid adding an extra server-side copy of a document containing your signature and personal details. Signegy handles lease signatures and rental documents in the browser without sending your file to a server, as do macOS Preview and other local PDF tools. That’s a smaller concern than the background check data itself, but for people who are careful about their data footprint throughout the rental process, it’s worth factoring in.
What comes next
The Davis v. Checkr case will work through motions, class certification, and, if it proceeds, discovery. FCRA class actions against background check companies have historically settled, sometimes for amounts that provide meaningful relief to class members and sometimes for amounts that mostly cover legal fees. The outcome here will depend on what discovery reveals about Checkr’s matching practices and how widespread the problem was.
The broader picture is of an industry where enforcement has produced settlements but not structural change. Appfolio settled in 2020 and the same category of accuracy failures continues to generate litigation. Whether the CFPB, which has authority over consumer reporting agencies under the FCRA, pursues systematic enforcement in tenant screening will shape whether these cases are isolated events or part of a longer pattern of accountability.