FTC reaches $48M settlement with leasing company for practices that allegedly harmed renters

PHOENIX (AZFamily) — Relief is coming for some renters in the Phoenix area who were misled about lease costs and other fees, the Federal Trade Commission announced Tuesday.

The FTC said it reached a $48 million settlement with Invitation Homes , a single-family home leasing and management company with a footprint in several cities across the country, including approximately 9,200 rental properties in Phoenix.

"For a period of years, Invitation Homes had several illegal business practices that significantly harmed consumers," Douglas Farrar, the FTC's director of public affairs, told On Your Side.

According to the FTC, Invitation Homes routinely charged renters undisclosed junk fees, failed to inspect homes before residents moved in and improperly withheld security deposits when tenants moved out.

"Basically, the scam worked like this: They would have one person walk through the home. The person would note down what was normal wear and tear and what was actually damaged, but they would have a second person who'd not been to the home make the determination to take the money," Farrar said.

The FTC also claimed Invitation Homes failed to properly maintain its properties and charged renters a slew of hidden fees.

"They would promise a price for a rental property, and once a person had submitted a $500 application fee and agreed to the rental, they would tack on a lot of junk fees. They would talk about an air filter fee or a smart home fee, and these fees could add up to almost $2,000 a year in some instances," Farrar said.

"We recently received our move-out statement from Invitation Homes and noticed several discrepancies," one former renter told On Your Side. "Invitation Homes is now claiming we owe $686.48 and has not returned our security deposit."

In July, another renter contacted On Your Side about an issue with the air conditioning unit at her Invitation Homes rental.

"Our A/C has been out for eight days now," she said. "We've reached out multiples times to get the issue resolved, but the company, Invitation Homes, and their property management is neglecting the issue."

Consumers who believe they are owed money from the $48 million settlement can contact the FTC's Consumer Response Center online or at 877-382-4357.

Invitation Homes did not immediately respond to On Your Side's request for comment.