Is it a violation of privacy laws for a former landlord to do a background check and share those results with my current one?

We have 4 great kids and had left the premises in good shape, less wear and tear, and they had verbally agreed it looked OK, but were going to hold the deposit to verify everything. They finally contacted us 3-1/2 months later, with a list of repair items totaling $4k! We knew this wasn't valid and protested, not only the amount but the late notice. They threatened us in every way, finally settling on doing a background check and sharing those results with our current landlord. (neither landlord did a background check) Is it legal for someone to use confidential information provided to them on a rental appication form, ie SS#, birthdates, license numbers, etc. after the completion of the application process and lease to obtain this? Is this a violation of privacy laws, or some other laws?