A judge says a class-action lawsuit against Zillow can proceed. Parties that filed the suit allege that Zillow’s “co-marketing” program between agents and lenders violates federal anti-kickback laws.
Judge affirms Zillow ‘co-marketing’ lawsuit can move forward
Zillow officials have called the lawsuit “without merit,” and company officials say they plan to “vigorously defend” against the accusations.
Zillow features a “premier” agents and brokers program, in which real estate professionals will get prominent advertising placements on its listed home sites. In 2013, Zillow added to the program, in which agents may have large portions of their advertising fees covered by lenders who share the advertising costs for prominent ad placements. Prospective buyers on Zillow would then see an agent and lender advertised as they browsed for homes. The program allows lenders to share access to these buyer leads.
However, the lawsuit alleges that the co-marketing program violates the Real Estate Settlement Procedures Act (RESPA), a federal law that prohibits the payment of fees for business referrals among real estate, mortgage and title industry companies that aren’t for services actually rendered.
In April 2017, the U.S. Consumer Financial Protection Bureau announced an investigation intowhether Zillow’s co-marketing program violated RESPA’s rules regarding kickbacks. However, the CFPB dropped its case following a new agency director was named.
Investors who purchased Zillow stock also filed a class-action lawsuit alleging securities fraud, however a district court judge dismissed components of that lawsuit. But plaintiffs were advised they are able to file an amended complaint if they could produce evidence that Zillow’s co-marketing program violated RESPA.
A federal district court judge ruled on April 19 that the lawsuit can proceed.
“The court can draw a reasonable inference that Zillow designed the co-marketing program to allow agents to provide referrals to lenders in violation of RESPA,” Judge John C. Coughenour of the United States District Court for the Western District of Washington wrote in his decision.
Have a questions or concern? Nick, Cindy & Nicholas Davis with RE/MAX Premier Group are here to assist you with all your Real Estate Needs. We are always available at 813-300-7116 to answer your questions or you can simply click here and we will be in touch with you shortly.
Need to get started with your mortgage process? You can contact Kyle Edwards with Iberia Bank at 813-495-5131, or simply click here to start your online application.
Ways Our Family Can Help Your Family
