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Eight real estate agents from California, Nevada, Washington, Florida, Georgia and New York state have filed a class action lawsuit against Realtor.com parent company Move for allegedly selling unverified and fraudulent leads through the Move Network websites, including Realtor.com, ListHub and UpNest.
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Move parent company News Corp and real estate lead generation technology platform Opcity, as well as the National Association of Realtors, are named as co-defendants for their roles in the alleged scheme to sell fake buyer leads. The plaintiffs are seeking damages equal to the amount they spent on Realtor.com leads, as well as any court-approved penalties and fines.
“The Defendants’ unlawful conduct alleged herein is so pervasive that it has damaged the good reputation of every prospective Class Member and the real estate brokerage (and agent) business as a whole,” the court documents state. “Defendants have been sued previously for nearly identical conduct and have settled those lawsuits, but continue to operate the scheme and the deceptive and unlawful business practices alleged herein.”
The lawsuit alleges that Move collects data from its owned, controlled, operated and affiliated websites, web properties, and digital and social media sites to gather information about users who search for common real estate industry terms (e.g., property, land, house, mortgage) or appear to be looking for other large non-real estate purchases, such as vehicles.
These users are then presented as fully vetted leads with high purchase intent on Realtor.com’s suite of lead generation solutions for buyers and sellers, including Connections Plus, ReadyConnect Concierge (formerly Opcity), Market VIP and ListHub. In addition to allegedly selling leads with no purchase intent, the lawsuit also claims that some leads cannot be verified as “real, live people.”
The lawsuit alleges that 40 to 50 percent of Realtor.com’s leads have no intent to purchase real estate or cannot be verified as a real person. In addition, Realtor.com sells the same group of leads (at least 36 to 40 per month) to multiple agents – violating its promise of lead exclusivity.
“Defendants further misled, defrauded, and intentionally deceived each of the plaintiffs (and each potential class member) by representing that each of these real estate agents would receive certain benefits by paying subscription fees, increased subscription fees, and other payments that would be highly likely to generate business and customers for each of these real estate agents,” the court documents state.
The plaintiffs said they notified Realtor.com of the problems with the low-quality leads and requested refunds, but Realtor.com’s sales team either denied the refund requests, offered credits that could be used to purchase more leads, or suggested that the agents purchase higher-value subscriptions to receive better lead quality.
“Each of these plaintiffs complained about the fake leads and demanded refund(s) and/or partial refunds from the defendants,” the court documents state. “However, the defendants then engaged in the Attrition Program (which involved showing or reading the fraudulent terms to each of these plaintiffs) and claimed that each of these plaintiffs was not entitled to such compensation.”
“In each of these situations, the defendants have failed and refused to refund the amounts paid by the respective plaintiff and/or to offer adequate compensation for them,” it continued.
The lawsuit alleges that officers, managing agents, managers, directors and executives at News Corp, Move, Realtor.com and NAR knew of increasing agent complaints about lead quality and “willfully and knowingly” ignored the alleged sale of unverified and fraudulent buyer and seller leads.
The plaintiffs specifically accused the NAR of “aiding and abetting” because they trusted Realtor.com’s products and services because of its affiliation with the association.
“NAR is (and was) independently and intimately aware of and complicit in the scheme, as NAR has relationships with and relies on the other defendants to increase its membership,” the court documents state. “NAR permits and assists in having its association with its co-defendants deemed to be a broad endorsement of the conduct alleged herein (and of the co-defendants’ fraudulent scheme itself), such that plaintiffs and each member of the prospective class trusted and relied upon NAR’s association with the other defendants and chose to do business with the other defendants, at least in part because of that relationship.”
“NAR has actively and passively induced each of the plaintiffs (and each member of the potential class) to do business with the defendants,” it said.
When asked about the lawsuit, a NAR spokesperson stated that Move, Inc. does not own or operate the organization and that the association will litigate these false allegations.
Inman has also reached out to Realtor.com and will add their statements as they become available.
This isn’t the first time Realtor.com has been sued over its lead generation business. In 2018, two real estate agents and a former Move sales representative filed separate lawsuits in Los Angeles Superior Court, claiming that Move/Realtor.com intentionally misrepresented the quality of the leads they sold to agents.
In a lawsuit, California broker John Herkenrath and Ohio broker Tina Wilson said they paid $500 and $120 a month, respectively, for buyer referrals. But Herkenrath and Wilson said the referrals were “useless” because they contained the wrong contact information or showed no interest in buying a home.
Meanwhile, former Move salesman Brian Bobik claimed in his lawsuit that he was wrongfully fired for refusing to defraud representatives by billing them for services they never ordered or received or charging their credit cards without authorization. He also claimed that Move refused to accommodate his disability, attention deficit disorder.
Bobik’s lawsuit was dismissed without prejudice in April 2019. Herkenrath and Wilson’s lawsuit was dismissed without prejudice in January 2020 after they failed to respond to a court order in a timely manner. Both parties had two years after the dismissal to refile the lawsuits, but they did not do so.
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