According to the complaint in Fish v. Entrata Inc., when Property Management Companies (PMCs)–landlords–switched from offering a product on an opt-in basis to offering tenants the product for free for a month, followed by a negative option opt-out, it had a dramatic effect on sales:
9. The RentDynamics website explains to PMCs that the “opt-out” nature of RentPlus is a significant driver of the product’s profitability. Prior to August 2020, RentPlus was offered through “opt-in” enrollment. However, approximately five years ago, Defendant began auto enrolling tenants and only providing them with the option to opt out of the service instead. This is sometimes called a “negative option.”
10. Defendant boasts to PMCs that when it made this switch to the negative option and stopped allowing renters to affirmatively choose to purchase RentPlus, enrollment soared from approximately 16% of renters in its customer properties to nearly 80%. This indicates that, when presented with a choice, consumers generally do not want or need the service RentPlus purports to provide.
For those wondering, RentPlus reports rent and utility payments to credit bureaus for a charge to tenants of $8.95 a month, some of which is allegedly kicked back to the landlords. To make matters worse, many landlords already report that information to credit bureaus, and in such cases, the tenants are paying extra to receive something they already receive without additional charge. I wonder how long it will be before lenders likewise start charging consumers for reporting their payments. Plaintiffs imaginatively filed the case for violating the Credit Repair Organizations Act, Colorado’s state version of CROA, the Colorado UDAP statute, and unjust enrichment.
