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THE SCREENING SCAM

Renter Beware

by Ben Jacklet

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Pier Di Carlo

When Mark Morris switched apartments last fall, his new landlord asked him to pay $25 for a credit check. It is a charge that most renters have come to expect and accept, but Morris wanted to know exactly what his money was buying.

Eventually, Morris learned that his landlord had purchased "tenant screening services" from the Apartment Association of Seattle King County (AASK), a non-profit corporation that lobbies for the interests of landlords. AASK had purchased a credit check from Equifax, a national company with annual sales of $1.5 billion. AASK paid Equifax $8 for the credit report, then billed Morris' landlord $20.63. The landlord in turn raised the price to $25.

When he called AASK to ask about the 200-plus-percent mark-up, Morris says, "They told me I had no right even dialing their number if I wasn't a landlord." He decided to deduct the difference between the $25 he was charged and the $8 that AASK paid to Equifax in his next rent payment. In return, he received an eviction notice. He had to pay back the difference plus a $100 late fee to avoid being kicked out.

Chris Benis, the president of AASK, verifies that his organization provides two levels of tenant screening services, one for $16 plus tax, the other for $19 plus tax. "We resell information," he says. "We don't do any investigative reports." Benis explains that the 200-percent increase covers the time AASK staffers spend looking up civil and criminal records on the SCOMIS Internet search engine. But anyone who's ever done a SCOMIS search knows it doesn't take more than a minute or two.

"I don't see [tenant screening] as a money-maker so much as providing a service to our members," says Benis.

It's illegal for a landlord to charge more for a credit check than it actually costs. But when's the last time someone's been charged exactly $20.63 for a credit check? Unfortunately, a renter's only recourse when overcharged is to take the landlord to small claims court, where it costs $30 to file, and the most you can win is $100.

Twenty-five bucks may seem like a minor expense to a renter paying a thousand or two for first and last months' rent plus security deposit, but if considering that (a) more than half of the people in Seattle rent; (b) more than half of the rentals turn over each year; and (c) tenants often pay for three or four (supposedly) different credit checks each time they move, one can see there's money to be made in this racket. A little over a decade ago, there weren't any tenant screening companies in the Puget Sound area. Today there are 36 companies listed in the Seattle phone book under credit reports, and 13 of them specifically advertise tenant screening services.

Bruce Neas of Columbia Legal Services says, "The problem with the screening companies is, they see the landlord as their client, when it's the tenants who are their clients. The tenants should get a copy of the report. They're the ones who paid for it."

But landlords rarely if ever provide copies of the credit reports to renters. In fact, AASK specifically tells its members not to do so. As a result, "The tenant never really knows whether the landlord does any screening," notes Neas. "And the tenant doesn't get to see what the contents of the report were, to figure out what the problem is and how to fix it."

State law requires a landlord to tell prospective renters exactly what the credit check pays for and the name and address of any companies used. Federal law mandates that if a tenant is turned down for a house or apartment, the landlord must send a letter of denial including the phone number of the credit company, so that the tenant can call and get a copy of the report for free, within a reasonable amount of time.

But in practice, most people just pay the fee and never find out what they bought, if anything. The last thing a renter wants to do when the first of the month is coming up and they are one of 15 people vying for an apartment is give the impression they're a whiner.

Bruce Neas thinks screening reports should be both accessible and portable, so that a renter could re-use the same report while looking for a new place, rather than paying for the same service three times in a weekend. Neas was part of a landlord/tenant work group that examined the issue at the state level in 1994/95. But they didn't get too far with their proposal, and the screening scheme, a growth industry of sorts, has since drawn more new players, including AASK.

Benis says he has "no idea" how often AASK resells credit reports or how much money the organization brings in by selling credit reports. He doesn't even know what AASK's annual budget is. "I'm just the president," he says.

News intern Jill Wasberg contributed to this report.