Yesterday, advocates from Towards Justice and Kelly Guzzo, PLC filed a nationwide class action lawsuit against property management technology (or “proptech”) company Entrata, Inc., alleging that Entrata’s RentPlus rent reporting product uses a deceptive auto-enrollment scheme to charge tenants rental junk fees while providing lucrative kickbacks to participating landlords. While Entrata touts RentPlus to young and low-income tenants as a way to build credit and improve credit scores, its marketing to corporate landlords highlights how RentPlus’s opt-out model dramatically increases enrollment and drives profit.
Plaintiffs Uriah Fish and Kelley Rowan allege that they were deceptively enrolled in RentPlus, which claims to report tenants’ on-time rent payments to major credit bureaus to improve consumers’ credit scores in exchange for a monthly fee, as part of signing their lease. According to the filing, Entrata’s own case studies boast that enrollment and profit exploded when the company stopped letting renters opt into the product and instead required them to affirmatively opt out to avoid being charged.
The complaint alleges that Entrata, which filed for an IPO last Thursday, violates laws like the Credit Repair Organizations Act (“CROA”) that were designed to protect consumers from deceptive practices regarding credit repair products, ensure they have clear, accurate information when considering whether to purchase a service claiming to improve credit, and prevent credit repair companies for charging customers before providing them with services.
“I was shocked when I found out I had been automatically enrolled in RentPlus,” said plaintiff Kelley Rowan. “I would have never signed up for RentPlus willingly had I known about it when I signed my lease, especially given the already outrageous number of fees I am being charged. Knowing now that my apartment management company gets a kickback from automatically enrolling its residents in RentPlus makes me feel even more like I’m being taken advantage of.”
“Landlords across the company increasingly see tenants as a captive audience they can milk for profit, burying them in junk fees for products they do not need and often don’t even realize they’re paying for,” said Toree Lindblad, an attorney at Towards Justice. “At a time when many are struggling to pay rent, it’s critical that tenants understand what they’re paying for and can make an informed choice about what they need.”
This case advances Towards Justice’s broader efforts to address the crisis in affordable housing for tenants in Colorado and nationwide. Related advocacy includes support for HB25-1090, Colorado’s junk fee law and Towards Justice’s work on class action litigation, including Collins v. Greystar, challenging the imposition of allegedly illegal junk fees by the corporate landlord and property management firm Greystar.
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