Does Your Safety Solution Violate the Fair Credit Reporting Act?
This year, nearly a quarter (22%) of residential Realtors experienced a situation that made them fear for their safety, according to NAR's 2024 Member Safety Residential Report.
It's a problem that's not talked about often enough, says Scott Martin, Founder and CEO of Tether RE, a real estate safety app that won the Pitch Battle at this year's iOi Summit. Martin points to the dire statistics: 2% of Realtors — roughly 30,000 — reported that they were a victim of violent crime in 2023, and 23 real estate professionals were killed on the job in 2022, according to the Bureau of Labor Statistics.
"That's 2500 Realtors who are victims of violent crime every month," he says.
Tether RE's approach to agent safety is two-fold. The app offers features — like location sharing, emergency SOS, open house monitoring, and 24/7 live monitoring with struggle detection — that protect agents in the field, and combines them with preventative pre-screening tools that head off threats before agents encounter them in real-life.
However, it's the pre-screening tools that can run agents — and the MLSs and associations that provide them those tools — into legal hot water.
Navigating the Legal Minefield of Prospect Screening
The Fair Credit Reporting Act (FCRA) regulates how consumer information is collected, shared, and used. Realtors and Realtor organizations can access data like criminal history and sex offender status without permission of the individual being screened.
However, violations occur if that screening includes financial information like credit scores and employment history, which can only be legally accessed with explicit permission from the screenee. Furthermore, if this information leads to an agent not working with a prospect, the FCRA requires that the agent notifies the prospect and provides them with the source of the information that led to the decision, as well as the opportunity to dispute errors.
Violations of the FCRA can result in civil penalties of up to $1,000 per violation for negligent noncompliance and up to $4,857 per violation for willful noncompliance. For real estate organizations that serve thousands of members — who, in turn, may each screen dozens or even hundreds of prospects per year — those penalties can add up fast.
Building a Better Screening System
For Tether RE, being a good partner to MLSs, associations, and their agents means protecting them from both physical and legal threats.
"Integrating criminal background checks into Tether RE took longer than expected, but we were committed to doing it right. The FCRA landscape is complex, and we knew we had a responsibility to protect both our agents and the individuals being screened," says Martin.
Tether RE's solution is to filter out roughly 90% percent of screening data, leaving only information that is FCRA-compliant but still useful for screening. This means keeping criminal history data like arrests, convictions, and incarcerations related to violent crimes or sex offenses, while excluding sensitive information like credit information, employment history, medical records, driving records, and data related to ethnicity, religion, or other personal beliefs.
"We believe this information is vital for agent safety, empowering them to make informed decisions about who they meet. By meticulously filtering out 90% of the data and focusing solely on public safety records like violent crimes and sex offender status, we provide critical insights while minimizing FCRA risks."
Tether RE's approach means that agents and the Realtor organizations they belong to can focus on the safety information that matters most, without worrying about FCRA compliance.
"We believe Tether RE's approach strikes the right balance between safety and legal compliance," says Martin.
To learn more, or to discover how your organization can partner with Tether RE, visit TetherRE.com.
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