Case focuses on online real estate giant’s co-marketing program for agents, lenders.
By Kenneth R. Harney Kenneth R. Harney Email Bio May 8 at 6:30 AM Zillow is back in hot water: A class-action suit against the online real estate giant is moving forward after insider whistleblowers alleged that the company designed its controversial “co-marketing” program to violate federal anti-kickback laws.
But a federal law known as RESPA — the Real Estate Settlement Procedures Act — prohibits payment of fees for business referrals among realty, mortgage and title industry providers that are not for services actually rendered. In April 2017, the Consumer Financial Protection Bureau informed Zillow that it was investigating whether its co-marketing program violated the law’s prohibition against kickbacks.
They appear to have done so successfully — at least enough to convince a federal district court judge to put the case back on track. Last November, the plaintiffs filed their amended complaint, bolstered by testimony from two unnamed Zillow insiders. The first: a regional sales manager for the company who alleged that lenders participated in the program because they “expected real estate agents to refer business.
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