The Armstrong suit, which was first filed in early November, contained similar allegations, claiming that Zillow pressures agents in its Premier Agent and Flex lead programs to steer buyers to Zillow Home Loans for their purchase mortgage pre-approval. Allegedly, agents who sent more clients to Zillow’s mortgage arm for their pre-approvals received extra or higher-quality leads in exchange.
In an amended complaint filed in the consolidated lawsuit in early January, the plaintiffs again claimed that Zillow tricks consumers into using agents affiliated with Zillow through its Flex and Premier Agent programs, resulting in inflated home purchase prices.
In its motion, Zillow argues that the plaintiffs’ claims should be dismissed for a variety of reasons. Namely, Zillow feels that the plaintiffs never show how they were harmed by Zillow’s “contact agent” button or the pre-approval letters, as Zillow notes in the filing that the buyers voluntarily worked with the agents and some of the plaintiffs did not use Zillow Home Loans for their mortgage. Zillow also claims that it clearly disclosed everything to consumers and that many of the plaintiffs’ claims were filed after the one year deadline for federal RESPA claims.
In addition, Zillow pushes back against the plaintiffs’ RESPA claims, claiming that there was no illegal “referral” as buyers were free to choose other lenders and that the plaintiffs did not pay for pre-approval letters, which are free and optional and not defined as “settlement services” under the law. Similarly, regarding the plaintiffs’ RICO claim, Zillow argues that no evidence of a criminal enterprise or intent to defraud was shown and no specific fraudulent acts were identified.
“The claims in this lawsuit are false and fundamentally mischaracterize how our business operates,” a Zillow spokesperson wrote in a statement. “Zillow is built around empowering consumers with information and choice, and our programs reflect that commitment. Through trusted local agents, clear accountability and tools, we work with partners to help buyers understand what they can afford and deliver strong outcomes for consumers while ensuring they remain in control at every step. We stand by our business model and we will vigorously defend against these meritless allegations.”
Additionally, in a blog post regarding the motion, the company said it has “strong reason to believe the lawsuit is being driven by competitors who want to deflect from their own challenges.”
This lawsuit is just one of many currently plaguing Zillow, with legal claims ranging from copyright infringement to antitrust violations.
