Saferent, an AI screening tool used by landlords, will no longer use an AI-powered “score” to evaluate whether someone using a housing voucher would make a good tenant. On Wednesday, U.S. District Judge Angel Kelly Final approval issued A settlement of approximately $2.3 million to prevent Saferent from discriminating against tenants based on income and race.
The settlement stems from a class action lawsuit filed in 2022 In Massachusetts. The lawsuit alleged that Saferant's scoring system disproportionately harmed people using housing vouchers – particularly black and Hispanic applicants. In addition to violating Massachusetts law, the complaint also accused Saferant of breaking the Fair Housing Act, which prohibits housing discrimination.
As explained in the initial lawsuit, Saferent's scoring algorithm uses factors such as credit history and non-rent-related debt to assign Saferent scores to potential tenants. Landlords can then use this score to determine whether to accept or reject someone's rental application. The lawsuit claims the process is not transparent, because Saferent does not tell homeowners how it determined a person's score. And the system reportedly unfairly gave lower scores to black and Hispanic tenants as well as people who used housing vouchers, leading landlords to reject their housing applications.
Under the five-year agreement, SafeRent will no longer display tenant screening scores for applicants using housing vouchers nationwide, nor include any scores when landlords use its “affordable” SafeRent score model. Are. If an individual uses a housing voucher, Saferent's service cannot also display a recommendation to “accept” or “reject” his or her application. This means that landlords now have to evaluate tenants who use housing vouchers based on their entire record, rather than using only their Saferent score.
“Credit scores and scores designed similarly, such as the SafeRent Score, are based on information that should only be[en] “The test was designed to predict repayment of credit obligations,” Shannon Kavanagh, director of the National Consumer Law Center, said in a statement. “There is no evidence that such data is predictive of rent payments by tenants.”
The money collected as part of the settlement will be given to Massachusetts-based rental applicants who used housing vouchers and were not able to secure housing due to Saferent's tenant scores. “Whereas Saferent continues to believe in SRS [SafeRent Solutions] Safrant spokeswoman Yazmin Lopez said in a statement that while Scores complies with all applicable laws, the litigation is time-consuming and expensive. The Verge“It has become increasingly clear that defending the SRS scores in this case would consume time and resources that Saferent could better use to fulfill its core mission of giving housing providers the tools they need to screen applicants. Is.”
Saferent is the latest algorithm-driven wealth management software to face legal action. in August, Justice Department filed suit RealPage claims that its algorithmic pricing inflates software fares.