Two real estate agents have filed a class-action lawsuit against realtor.com operator and News Corp. subsidiary Move Inc., alleging the company has defrauded thousands of agents by failing to deliver the number of viable leads from Realtor.com it promises.
Two real estate agents have filed a class-action lawsuit against realtor.com operator and News Corp. subsidiary Move Inc., alleging the company has defrauded thousands of agents by failing to deliver the number of viable leads from realtor.com it promises.
Realtor.com “frequently fails to deliver what it claims to be selling,” according to the three-count complaint filed last week in Los Angeles Superior Court, by California agent John Herkenrath and Ohio agent Tina Wilson.
The plaintiffs allege that they paid Move $500 and $120 a month respectively for a certain number of buyer leads from realtor.com, and over the course of months realized that most of the leads the company was providing were “useless” either because the contact information was inaccurate or the people that were reached had no interest in purchasing a home.
In an emailed statement, realtor.com spokesperson Janice McDill told Inman: “The allegations are without merit, and we will defend the case vigorously. Beyond that, as a matter of policy on legal matters, we will have no further comment, except to note that tens of thousands of real estate professionals use our products to connect with clients and build successful businesses.”
Specifically, the suit says that Move:
- Counts the same individual as separate leads each time that person submits a contact form for a listing, whether the listings are in different ZIP codes or not and whether or not that person was already previously provided as a lead
- Fails to remove duplicate leads that, though they may have different contact information, are clearly the same lead based on IP address and time of contact form submission
- Fails to remove clearly fraudulent or fake leads based on IP address, the person’s geographic location, the information submitted on the contact form, and history of submissions from the same device or IP address
- Provides the same person as a lead to multiple Move customers despite promising one or more of those customers “exclusive leads”
Move promises its customers a minimum number of leads per month and assures them that it has tested each market area in advance to know that there will be a regular supply of leads, according to the complaint. But: “At the time that it makes these assurances, Move eithers [sic] lacks the information that it claims to possess regarding the number of leads that it is able to generate or affirmatively knows that it cannot supply the number of leads that it promises,” the complaint says.
“These promises provide Move with a strong financial motivation to avoid doing anything (including employing basic safeguards and review of leads) that would reduce the number of putative leads that it sends to its customers. Despite this, Move is frequently unable to provide its customers with the number of monthly leads that it promises.”
The complaint demands a trial by jury and accuses Move and a subsidiary, Move Sales Inc., of breach of contract, violation of California’s unfair competition law and unjust enrichment. The suit seeks class-action status and proposes to include all people who paid Move or Move Sales for any buyer leads while living in the U.S. as of April 20, 2014 — a figure the plaintiffs estimate numbers in the “thousands.”
The plaintiffs have asked the court to order Move to stop its alleged unlawful and deceptive business practices and require Move to give back the funds it obtained from the plaintiffs and members of the class.
The allegations in the agents’ complaint echo those made by former Move sales rep Brian Bobik in a lawsuit filed in January. Bobik alleged he was wrongfully terminated from Move in retaliation for objecting to and refusing to participate in what he believed to be unlawful conduct, including lying to real estate agents to get them to pay for leads, delivering “bogus” leads, charging agents for services they never ordered or received, and billing agents’ credit cards without authorization.
Following the publication of Inman’s story on Bobik’s lawsuit, several dozen agents commented on Inman’s website claiming they experienced similar fraudulent acts after purchasing leads from realtor.com. Inman also received at least two dozen unsolicited emails and Facebook messages from agents with similar claims. Inman did not receive an email from the plaintiffs behind the class-action suit.
One of the law firms bringing the agents’ class-action suit, Berokim & Duel, P.C., is also representing Bobik. The other law firm representing the agents is Arias, Sanguinetti, Wang & Torrijos, LLP.
Move subsidiary RealSelect runs realtor.com on behalf of the 1.3 million-member National Association of Realtors under the terms of a 1996 operating agreement, which has been amended multiple times over the years.
Asked whether the agreement prohibits Move’s alleged behavior and whether NAR plans to take any specific action in response to the allegations, NAR declined to comment.
“We generally do not comment on pending litigation, so we are not in a position to comment at this time,” NAR spokesperson Jane Dollinger told Inman in an emailed statement.