Realtor Fake Lead Fraud Investigation | Class Action Lawsuit
The class action attorneys at The Lyon Firm are investigating deceptive real estate marketing claims, and reviewing a recent case of alleged realtor fake leads fraud. Contact our consumer fraud lawyers to learn more about false advertising lawsuits and to understand the legal process of filing a claim against a company selling fake leads.
Alleged Realtor Fake Lead Fraud Results in Class Action Lawsuit
The National Association of Realtors (NAR) has been named a defendant in a fake real estate lead lawsuit. The class action complaint, filed in California, claims that NAR, along with Move Inc., Move Sales, OpCity Acquisitions, OpCity Inc. and REA Group Ltd. defrauded agents by selling them fake leads.
To be clear, NAR is a trade group and does not directly sell consumer leads to agents. However, plaintiffs claim that NAR knew about the unlawful and unethical practice and “knowingly conspired with, aided and abetted and participated in the conduct alleged.”
According to the lawsuit, this is not a single instance or temporary oversight, but the defendants have a history of operating their businesses in a “fraudulent, deceptive and unlawful manner,” and have received hundreds of complaints for continual involvement in the generation and proliferation of false real estate leads.
In regard to addressing these consumer concerns, the complaint alleges NAR did not do enough to curtail any deceptive marketing practice involving fake real estate leads. In fact, the plaintiffs say the defendants “consistently failed and refused to properly train, screen, conduct background checks, supervise, reprimand, direct and instruct” their management about basic realtor ethics and company policies. As a result, realtor fake leads were allegedly regularly distributed without any recourse until the recent lawsuit.
The plaintiffs allege Move scrapes data from various websites to find users who may be looking at real estate terms or potential purchases. Many realtors, however, were apparently sold leads that included many consumers who clearly had no interest in buying a house.
The official legal complaint states that the defendants “were keenly aware that at approximately half of these so-called ‘leads’ that defendants bundled and sold to plaintiffs were not ‘leads’ at all; but a series of individuals for who defendants have collected personally identifying information, but who have no interest in purchasing real estate.”
Attorneys say there may have been deliberate fraud when the defendants created a “fake leads scheme” in which they distributed misleading information, using the National Association of Realtors badge as a sort of name recognition cover. In addition to the long list of claims, the plaintiffs allege Realtor.com sells the same group of leads to multiple agents, violating an exclusivity deal.
A sales team was allegedly trained and provided with misleading scripts designed to sell false and fraudulent information. Plaintiffs were thereby coerced into signing up for various lead generation products, and the defendants then suddenly changed contract terms and conditions without notifying the plaintiffs. The plaintiffs claim the realtor sales team responded to many of the above complaints by suggesting agents buy high-tier subscriptions for better leads.
The complaint clarifies that NAR itself did not sell leads, but the plaintiffs claim that NAR may be held accountable because it authorized its co-defendants to “utilize NAR’s name, logo, intellectual property, database and goodwill to market, promote and legitimize the products and services of its co-defendants.”
In a statement to the press, a spokesperson for Realtor.com said the company does not comment on pending litigation.