As the COVID-19 pandemic ravages bank accounts worldwide, one Ontario-based company is looking to create what one housing lawyer called a "blacklist" of renters who missed payments on April 1, raising concerns among privacy experts and tenant advocates.
Naborly is a service that uses artificial intelligence to screen prospective tenants — including a credit check, criminal background check, social media scan and more — and assigns them <a href="https://naborly.com/wp-content/uploads/2017/02/Naborly-Sample-Report-2019.pdf?__s=cigzi6p9i66ghy0zbd5g" target="_blank" rel="noopener noreferrer">scores</a> based on how likely it believes them to meet risk factors like causing property damage or requiring eviction.
The company also lets landlords submit <a href="https://support.naborly.com/hc/en-us/articles/360039132532-How-do-I-report-a-tenant-?" target="_blank" rel="noopener noreferrer">reviews of tenants</a> they've rented to, including the tenant's full name, address, a star rating out of five and what kind of conflict the landlord may have had with the tenant. It is encouraging its users to use that service to help create a "database" of tenants who missed rent on April 1, to be made "<a href="https://support.naborly.com/hc/en-us/articles/360039132532-How-do-I-report-a-tenant-?" target="_blank" rel="noopener noreferrer">available</a> for all our landlord users in the future."
"The more data we have on what happens over the next few days is going to really accelerate our ability to retrain our AI systems and then help all of you accurately understand tenant risk moving forward into this new world," Naborly CEO Dylan Lenz said in a YouTube <a href="https://www.youtube.com/watch?v=YrK8mKRsvN4" target="_blank" rel="noopener noreferrer">video</a> on April 1.
"This database helps other landlords know in the future if a tenant has been delinquent in the past, while also helping Naborly continue to deliver the most accurate and up-to-date tenant screening service in the market," reads one email sent from the company to landlords on April 2. "Please note that we keep reporting fully confidential and DO NOT notify your tenant that you have reported to our system."
Former Ontario Information and Privacy Commissioner (IPC) Ann Cavoukian called the practice "unconscionable."
"If I were still the commissioner, I would be all over this," said Cavoukian, who has raised <a href="https://www.ctvnews.ca/sci-tech/get-ready-to-give-up-your-online-privacy-to-score-the-perfect-rental-1.3192709" target="_blank" rel="noopener noreferrer">concerns</a> in the past about Naborly's extensive screening process.
"I'm just very concerned that during these very troublesome times, that people's failure to pay rent is going to be communicated widely. I think that's just outrageous," she said.
Cavoukian, who now leads Ryerson University's Privacy by Design Centre of Excellence, said Naborly may be in violation of the province's Health and Information Protection Act since future landlords may draw inferences that a tenant was sick with COVID-19 and thus unable to pay their rent.
Ontario Privacy Commissioner Brian Beamish said in a statement that that was unlikely, as any such inference "would be highly speculative."
Housing lawyer Benjamin Ries, with the University of Toronto's Downtown Legal Services, said his organization has sent a letter to Naborly seeking clarification of the company's intentions, because it seems like it's building an illegal "blacklist."
Ries said Naborly seems to be acting as a consumer reporting agency, of which there are currently two licensed in Ontario: Equifax and TransUnion. The industry is tightly regulated due to the personal information involved.
According to Ontario's <a href="https://www.ontario.ca/laws/statute/90c33" target="_blank" rel="noopener noreferrer">Consumer Reporting Act</a>, consumer reports include "credit information or personal information" that is used to make decisions about, in part, "entering into or renewal of a tenancy agreement."
"So if the whole purpose of the five-star review is for future landlords to look up a prospective tenant and include that in their decision as to whether or not they should rent to that tenant, then it sure seems like" Naborly is producing credit reports, Ries said.
He also noted that Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) contains strict rules about personal information that can be collected by businesses — including the requirement to allow people to see what information has been collected about them, and provide the opportunity for them to challenge it if they feel it's incorrect.
But Naborly "seems to offer something like the opposite, right? It seems to say, 'Don't worry landlord, we won't tell your tenant that you've reported this personal information about them.' I mean, that's squarely opposite from what I understand to be the basic privacy regime that all businesses in Canada are subject to," he said.
"It seems like this is a blacklist that Naborly is hoping that landlords will help create by just informing on every single tenant, whether they've paid or not," he added. "It does not seem legal."
If Ries isn't satisfied with Naborly's explanation, or if they don't respond to his letter, he said he will escalate the matter to the federal privacy commissioner and Consumer Protection Ontario.
The process has also raised concerns from the Canadian Civil Liberties Association (CCLA), which noted that property managers in Canada are not allowed to <a href="https://www.priv.gc.ca/en/opc-actions-and-decisions/investigations/investigations-into-businesses/2016/pipeda-2016-002/" target="_blank" rel="noopener noreferrer">publish "bad tenants" lists</a>.
“I fear that Naborly is trying to split hairs and exploit loopholes in order to do obtusely what they cannot do directly under privacy laws," CCLA Executive Director Michael Bryant said, noting that while the company claims it's not a property manager, "my view is that it does conduct many of its functions."
Ries said the idea to create "bad tenant" lists is a common one in Ontario, but "I've never seen anything quite so brazen and out in the open as this business appears to be."
Bryant also brought up the issue of consent.
"Are the tenants consenting to giving up all their privacy rights informed or are they being tricked? Does Naborly truly have tenants’ consent to defame them?" he said.
Bryant called for an investigation of Naborly, which operates in Canada and the U.S., by the federal privacy commissioner. The CCLA will be involved somehow, he said, though they're currently "at capacity" dealing with governmental responses to COVID-19.
A spokesperson for the federal commissioner said the office isn't in a position to comment on this specific case, but also pointed to the OPC's 2016 "bad tenant list" <a href="https://www.priv.gc.ca/en/opc-actions-and-decisions/investigations/investigations-into-businesses/2016/pipeda-2016-002/" target="_blank" rel="noopener noreferrer">case</a>.
Landlords can sometimes collect personal information to verify someone's ability to pay rent, Vito Pilieci said. But the tenants in that case had not given "meaningful consent" to that information being collected.
Also, allowing landlords access to tenants' past paying habits meant the company in question was "acting as a credit reporting agency, without a requisite licence," he said.
Geordie Dent, the head of the Federation of Metro Tenants' Associations, said the practice is a "disaster" for tenants, who may be discriminated against by future landlords for missing one month's payment due to a global crisis.
"Would you, or any of your readers, want their personal information like that in a database that somebody else could check?" he said, calling it "scary."
After Naborly gained some <a href="https://twitter.com/terralynnpobuda/status/1246143376757579777" target="_blank" rel="noopener noreferrer">negative attention</a> online, Lenz sent out another email apologizing for the way the request came across.
"Upon reflection, I recognize that the email was poorly worded and did not provide sufficient context. I am deeply sorry if it suggested that Naborly or myself were trying to do anything other than help," he wrote.
Naborly did not respond to a request for comment.
The province has ordered a temporary <a href="https://www.qpbriefing.com/2020/03/17/covid-19-watch-opposition-support-evictions-paused-malls-open/" target="_blank" rel="noopener noreferrer">halt on evictions</a> during the pandemic. Premier Doug Ford has said if renters have to make a choice between paying for rent and putting food on the table, they should choose food.
Ontario's Ministry of Housing did not comment on the collection of personal information, but called on landlords "to be as flexible as possible when it comes to collecting rent, starting with April, at a time when many people are struggling."
Spokesperson Conrad Spezowka noted that tenants who have been locked out of their units or are facing threat of illegal eviction can contact the ministry's Rental Housing Enforcement Unit at 1-888-772-9277 or mho.rheu.info@ontario.ca.

‘Unconscionable’: Landlord service Naborly draws criticism for creating ‘blacklist’ of tenants who missed April 1 rent

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