Another Big Lawsuit: Fake Leads

Lots of new litigation around NAR continues
This case is about “fake” lead generation schemes
Contract terms were changed without notifying the agents

It’s officially salad days for litigation attorneys in the real estate space, with everyone suing everyone. With the Sitzer/Burnett class action decision last fall, the subsequent NAR settlement, and the proliferation of its copycat lawsuits, the lawyers involved were likely able to buy much bigger homes. And let’s not forget about the Homie Technologies steering lawsuit against Realtors in Utah. Now, eight Realtors have filed a class action against Move, the parent company of Realtor.com, for selling fraudulent leads to real estate agents.

As a reminder, NAR only exists to help real estate agents, doesn’t it?

Lead generation is the secret sauce that essentially drives the real estate tech space. Real estate agents pay for information that suggests a consumer is considering buying a new home. Realtor.com is a website owned by News Corp, which licenses the “realtor.com” brand from NAR. They also own other properties like the Wall Street Journal. Both NAR and Opcity (a lead generation platform) were also named in the lawsuit.

NAR typically washes its hands of anything Realtor.com does, but the lawsuit goes all in on their participation in the fraud. Please remind me again what value-add NAR brings to the real estate brokerage community. The class action lawsuit was filed in Los Angeles Superior Court. As an aside, I’ve testified there many years ago in the winter. I remember having a light lunch under palm trees with my client, the late actress Lynn Redgrave, joking about the British words for “bathroom.” She was lovely. I really thought about why I didn’t live in LA after considering a cold, gray wintertime in New York City (ok, I love it).

But I digress…

Here’s more on the new litigation:

Inman News reports: Realtors file suit against Move, NAR over ‘fake leads’ scheme

“The lawsuit alleges 40 to 50 percent of Realtor.com leads have no intent to purchase real estate or cannot be verified as a real person. Furthermore, they said, Realtor.com sells the same group of leads (a minimum of 36-40 per month) to multiple agents — breaking a promise of lead exclusivity.”

Real Estate News reported: Move accused of selling ‘fake leads’ in class action lawsuit

“In many cases, Defendants knew they could not verify that the personally identifying information sold to Plaintiffs is even legitimate or truly associated with an actual, living human being,” the complaint reads. “Defendants failed and refused to take any action to vet, legitimize and/or confirm the identity of these so-called ‘leads’ and deliberately sold fake and false leads along with other leads which ranged from highly questionable to legitimate.”

In other words, the lawsuits claim NAR was part of a conspiracy to defraud real estate agents who were paying for leads. When they complained about the terrible quality, the plaintiffs were rebuffed by not being able to get back their fees after complaining about the poor quality.

Housingwire noted in their NAR, Move named in new lawsuit alleging sale of fake leads

The defendants created a “fake” lead scheme and leveraged their association with NAR to perpetrate the fraud. NAR is included because they required their logo and branding to be included by the defendants in the product. Remember, agents should trust the Realtor.com brand. Ha.

What’s most insane is that after the plaintiffs signed up for various lead generation products, the defendants reportedly changed the contract terms without notifying the plaintiffs!

How’s that for bad behavior?

Final Thought

I thought that the NAR settlement would shake things up, but I didn’t expect the extent of litigation between industry members in a once cohesive (fake) industry. Exposing NAR’s bad behavior seems to be a regular thing in the courts. Without authentic industry leadership, NAR keeps making the case for extinction.