Real estate agents sue over 'fake leads'

A group of real estate agents accused Move Inc. -- the parent company of Realtor.com -- and the National Association of Realtors of selling them fake leads, in a lawsuit filed in Los Angeles County. They seek to certify a nationwide class of all real estate agents similarly affected.

The eight plaintiffs claim they paid for 36-40 leads of prospective home buyers every month. However, they said, many of the potential leads were not interested in buying homes and the defendants knew this.

The National Association of Realtors is the nation's largest realtor organization and does not sell leads. Plaintiffs sued the organization because they said it allowed the other defendants to use its name and logo to promote their products and services at issue.

A representative of the trade organization said, "NAR does not own or operate Move Inc. We will address these false allegations in court."

The leads were instead drawn from "numerous websites and brands which are designed to attract, even tangentially, anyone who interacts with key words such as 'home,' 'property,' 'real estate,' 'house,' 'mortgage,' 'rent,' etc., attorney Michael S. Traylor wrote in the complaint, filed last week. He said the leads also intentionally included prospective purchasers of vehicles, unrelated products and services, non-existent consumers, duplicative consumers and "other persons with no interest whatsoever in purchasing real estate properties."

The defendants are accused of engaging in the "unlawful bundling" of legitimate and false leads to create an "exaggerated, padded and fraudulent database." They allegedly sold these leads to unsuspecting real estate agents knowing that approximately 50% were not legitimate. Bandy et al., v. Move Inc., et al., 24STCV21494 (L.A. Super. Ct., filed Aug. 23, 2024).

Sales teams with Move Inc. were encouraged with large sales commissions and punished severely if real estate agents canceled their orders, the lawsuit claimed.

The plaintiffs claim fraudulent inducement, breach of oral contract, breach of implied covenant, fraud, conversion, violation of the Consumer Legal Remedies Act and unfair business practices. Any class could potentially be substantial: More than 1.5 million realtors in the United States subscribe to the National Association of Realtors' code of ethics, according to the organization.

A Realtor.com spokesperson said, "We don't intend to comment on pending litigation and will vigorously defend ourselves against all claims contained in the lawsuit."