Legal experts say RESPA suit against Zillow is going nowhere fast'

"The lawsuit makes the valid point that the large contact agent' button at the top of the page can easily mislead buyers into thinking that they are contacting the listing agent, Stephen Brobeck, a senior fellow at the Consumer Policy Center (CPC), wrote in an email. Even though this agent is named in small print farther down the page the button would be more accurate if it read, contact a buyer agent.'"

"Wendy Gilch, another fellow at the CPC, agrees, adding that the lawsuit is important because it is forcing the industry to ponder whether or not agents are getting true informed consent from consumers when sometimes close to 50% of their commission is going to a third-party referral source. Every referral program should be asking themselves right now whether their clients really understand where their money is going, Gilch wrote in an email."

"Despite her support of the premise of the lawsuit, Gilch said she believes that the lawsuit feels a bit targeted. There are probably 50+ other companies running similar undisclosed referral programs, some of which also use listings, Gilch wrote. The selective targeting here, especially after Zillow's pocket listing restrictions, suggests this might be as much about industry politics as consumer protection. If we really care about informed consent, why not go after the whole ecosystem?"

A lawsuit contends that a prominent "contact agent" button can mislead buyers into thinking they are contacting the listing agent, while the listing agent appears only in small print. Consumer Policy Center fellows say the button would be more accurate if it read "contact a buyer agent" and that undisclosed referral fees, sometimes approaching half of a commission, raise informed-consent concerns. Referral programs should disclose where client money goes and be upfront about fee structures. One fellow calls the lawsuit selectively targeted amid many similar programs, and legal experts express skepticism about the suit's prospects.

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