Eviction Postcard Campaign Sparks $1.625M FCRA Settlement
The tenant screening market is competitive with numerous tenant screeners (aka consumer reporting agencies or CRAs) battling for business from property managers and landlords. In an effort to win more business, tenant screeners may opt for creative marketing strategies. However, not every idea is a good one. One example is sending consumer eviction information on postcards to unverified organizations in an effort to solicit business.
This exact practice allegedly occurred in the case Clermont v. National Tenant Network, Inc. and LCIJ, Inc. The plaintiff filed a class action complaint in the United States District Court of New Jersey against the tenant screening firms alleging violations of the Fair Credit Reporting Act (FCRA). Following years of litigation, the parties announced they reached a $1.625M settlement which received preliminary court approval on June 23, 2026.
What Sparked the FCRA Class Action Lawsuit?
The plaintiff claimed the defendants mailed postcards to various “unverified” landlords – where there was no CRA-client relationship – which contained information about a consumer’s prior eviction history. Included on the postcards were statements such as “NTN would have warned you about trouble tenants like this BEFORE they became YOUR residents” with language advertising their eviction database and retail credit data services. The postcards included contact information for the landlords to sign up for tenant screening services.
How the Postcards Allegedly Violated the FCRA
The plaintiff argued that the postcards are consumer reports as they contained consumer information that “bear negatively on Plaintiff’s reputation and creditworthiness.”
As alleged in the complaint, mailing these postcard consumer reports to unverified landlords violated the FCRA in several ways. First, the plaintiff claimed that this practice violated Section 604(a) (§1681b(a)) which outlines the permissible purposes under which a consumer report may be provided from a CRA to a user of such consumer report.
Next, the practice allegedly violated Section 607(a) (§1681e(a)). Under this section of the FCRA, CRAs must maintain reasonable procedures to limit furnishing consumer reports to organizations who intend to use the information in accordance with a permissible purpose outlined in Section 604(a). Such procedures must “require that prospective users of the information identify themselves, certify the purposes for which the information is sought, and certify that the information will be used for no other purpose.” Further, CRAs must make a “reasonable effort to verify the identity of a new prospective user and the uses certified by such prospective user before furnishing such user a consumer report.”
Essentially, the plaintiff argued that the CRA provided consumer reports to businesses without:
- (i) requiring the recipients to validate their identity or certify the purpose for which the information would be used,
- (ii) verifying the purpose for which the consumer reports would be used
- (iii) obtaining authorization for sending the reports from the subjects of the reports.
FCRA Class Action Settlement Details: $1.625M Fund
The court certified the following class:
All persons who were the subject of Defendants National Tenant Network, Inc’s and LCIJ, Inc.’s postcards, substantially similar to the postcard concerning Plaintiff, sent during the applicable FCRA statute of limitations period, 15 U.S.C. § 1681p, as determined by whether and when the person that was the subject of one of Defendants’ postcards discovered that it was sent.
The class period covers individuals who meet that definition from June 30, 2018 to December 3, 2023.
Out of the total $1.625M settlement fund, the plaintiff (i.e., the class representative) will receive a to-be-determined award, while the plaintiff’s attorneys will submit a written application for their fees to be paid from the settlement fund. While no amount is yet specified, it’s generally common for attorneys’ fees to be at least 25-30% of the settlement amount. Ultimately, the court will determine the final attorney fees’ amount and any incentive award to the named plaintiff.
Class members must submit a valid claim form before the deadline with a valid claim ID to receive a pro rata share of the remaining settlement fund. The total amount each individual receives will depend on the number of claims filed. A final approval hearing is scheduled for December 8, 2026.
It’s important to note that the defendants denied any wrongdoing, denied that the postcards constitute consumer reports, and denied that they violated the FCRA or any other law.
Key FCRA Compliance Takeaways for CRAs
Any company providing consumer report information, regardless of the medium in which such information is made available, must remain cognizant of its obligations under the FCRA. While lawsuits against tenant screeners generally focus on the accuracy of the criminal or eviction record information provided, this lawsuit is a good reminder that there are many important steps to follow before even providing a consumer report. This includes ensuring you maintain reasonable procedures to validate who is actually going to receive the consumer report and how the consumer report will be used.
How Capwell Consulting Group Can Help
Cases like this underscore how quickly a well-intentioned marketing tactic can turn into an FCRA class action settlement. Capwell Consulting Group provides expert witness and consulting support in FCRA litigation, helping attorneys, consumer reporting agencies, and employers navigate disputes over permissible purpose, disclosure, and reasonable procedures with clear, defensible positions. Our expert brings decades of real-world CRA and background screening experience to case strategy, expert reports, and testimony.
About The Author
Kelly Uebel is a legal and compliance expert and authority in the employment and tenant background screening industry. Kelly brings more than 14 years of experience with the Fair Credit Reporting Act and its state analogues, fair chance laws, and negligent hiring issues to her background screening expert witness role with Capwell Consulting Group.
Source: capwellconsulting.com
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