Real estate firm operating in North Carolina fined $62 million for ‘cheating’, ‘deceit’
RALEIGH, NC (WNCN) — Tech real estate companies have taken advantage of the convenience they provide to buyers and sellers.
Companies can facilitate the process of marketing your home or getting into your dream home. But the Federal Trade Commission says convenience comes at a cost.
FTC fines tech real estate company Opendoor for “misleading potential home sellers into thinking they could make more money selling their home on Opendoor than on the open market using the sales process traditional”.
The FTC said that rather than saving money, customers who sold to Opendoor typically lost more money than they would have made in the traditional market.
Opendoors signs can be seen on the lawns of many homes across the Triangle. A search of the company’s website shows more than 4,000 homes for sale in the Raleigh and Durham area alone.
“There’s nothing innovative about misleading consumers,” said Samuel Levine, director of the FTC’s Consumer Protection Bureau.
Opendoor has now agreed to the following:
- Reimburse $62 million to customers
- Stop fooling potential home sellers
- Stop making unsubstantiated claims and instead use competent and reliable evidence to back up any representations made about costs, savings or financial benefits
BE THE FIRST TO KNOW: Sign up here for QC News alerts and get the latest news straight to your inbox
In a statement to CBS 17, Open Door said, “While we strongly disagree with the FTC’s allegations, our decision to settle with the Commission will allow us to resolve the issue and focus on helping consumers. to buy, sell and move with simplicity, certainty and speed.”
They added, “It is important to note that the allegations raised by the FTC relate to activities that occurred between 2017 and 2019 and target marketing messages that the company changed years ago.”
The FTC said Opendoor defended its business practices, calling them “transparent, fair, and accurate.” The Commission said the company would provide potential customers with graphs showing their savings using their service compared to the traditional market. The FTC said these graphs do not reflect true end costs.
“Too many businesses that sell goods or services online or operate web-based platforms believe that established consumer protection principles do not apply to them. This is a major error,” the FTC said.
Click here to read the full complaint against the company.