Move is accused in class action lawsuit of selling “fake leads”

A group of real estate agents filed a class action lawsuit late last week against Realtor.com parent company Move, Inc. and the National Association of Realtors over Move's lead generation products.

Specifically, the plaintiffs in the lawsuit allege that Move participated in the “unlawful bundling” of low-quality or “fake” leads and then sold them to agents. They also claim that NAR is complicit because of its connection to the other defendants.

The plaintiffs – eight brokers from the states of Nevada, California, Washington, Florida, New York and Georgia – want to open the class to brokers across the country who have bought leads from Move over the past four years. The suit was filed in Los Angeles Superior Court, where Move is headquartered, and also names News Corp, owner of Move, and subsidiaries Move Sales and OpCity.

Agents have a problem with “false” clues: In the complaint, the plaintiffs' attorneys allege that a significant number of Move's leads were not properly vetted or were not even leads at all, but rather that the company collected information from people “who have no interest in purchasing real estate.”

“In many cases, Defendants knew they could not verify whether the personal information sold to Plaintiffs was even legitimate or actually associated with a living human being,” the lawsuit states. “Defendants failed and refused to take any steps to verify, legitimize and/or confirm the identity of these so-called 'leads,' and intentionally sold fake and false leads along with other leads that ranged from highly questionable to legitimate.”

The plaintiffs also objected to features such as “exclusive” leads that they claimed were sold to other agents. More than half of the leads the plaintiffs purchased through Move brands were “fake” leads.

Why NAR is listed as a defendant: The plaintiffs also named the National Association of Realtors in the lawsuit. While Move and Realtor.com operate independently of NAR, the plaintiffs accuse NAR of providing cover to Move through its relationship to licensing the Realtor brand.

“NAR is (and was) independently and intimately aware of and complicit in the scheme, as NAR maintains relationships with and relies on the other defendants to increase its membership numbers,” the lawsuit states. “NAR permits and assists in having its association with its co-defendants deemed to be a broad endorsement of the conduct alleged herein, such that plaintiffs and each member of the prospective class trusted and relied upon NAR's association with the other defendants.”

Who the lawsuit concerns: The plaintiffs claim that the “unlawful conduct” is “so widespread that it has damaged the reputation of every potential class member and the entire real estate brokerage and agent business.”

In addition, the plaintiffs are asking that the class action lawsuit be expanded to include “all real estate agents in the United States” who purchased “fake leads” from Move over the past four years.

Neither representatives of the defendants nor the plaintiffs' legal counsel were immediately available for comment.

Other litigation: Move has made headlines for being a plaintiff in another recent case. The company is suing CoStar for allegedly stealing trade secrets (which CoStar CEO Andy Florance called “ridiculous”).

Meanwhile, the NAR has faced two industry lawsuits in recent weeks: one filed by brokers challenging mandatory membership rules, and another filed by flat-fee brokerage firm Homie, which alleges anti-competitive practices and steering.