SEATTLE, WA., November 06, 2007 – Attorney General Rob McKenna today announced a settlement with a Kirkland-based company that sells leads to real estate agents on a subscription basis. HouseValues, Inc., is accused of misrepresenting the quality of information it provides and misrepresenting subscribers’ cancellation rights.
The settlement filed Monday in King County Superior Court resolves allegations that HouseValues, Inc., doing business as HouseValues.com and JustListed.com, violated the state’s Consumer Protection. The company didn’t admit any wrongdoing but agreed to comply with injunctive provisions concerning its business practices, waive any fees owed by consumers who filed complaints with the Attorney General’s Office and other specified consumer agencies, and pay $51,000 in costs and attorneys’ fees.
“Washington businesses cannot mislead consumers about the quality or character of their products,” Assistant Attorney General Shannon Smith said. “Consumers are entitled to accurate information before they decide to make a purchase.”
HouseValues sells leads to real estate agents in the United States and Canada for hundreds of dollars per month and markets its services through telemarketing and TV, radio and Internet ads. The company obtains its inventory of leads from individuals who provide information by accessing the Housevalues.com and Justlisted.com Web sites.
The Housevalues.com site offers prospective sellers a free home valuation report. Once a homeowner enters the information online, HouseValues sends that information to a subscribing real estate agent, who will contact the person and offer to provide the person with a suggested listing price.
Justlisted.com offers free listings. Interested buyers enter their personal information, which HouseValues sends to real estate agents that subscribe to its service.
The state’s complaint alleged that HouseValues misrepresented that its leads were good quality and implied that more than 20 percent of the leads would result in a sale, but some did not contain accurate contact information or were plainly invalid.
The Attorney General’s Office also accused HouseValues of telling real estate agents that they could subscribe for a trial period and cancel at any time without penalty. But when agents canceled during the trial period, HouseValues charged them an early termination fee based on a 12-month agreement.
Under the settlement terms, HouseValues is prevented from doing any of the following:
- Misrepresenting the quality or validity of leads it sells or provides to subscribers,
- Misrepresenting the nature and duration of a subscription term,
- Charging an early termination fee unless the contract or agreement clearly and conspicuously discloses the early termination fee and how the fee is calculated, and
- Misrepresenting that a subscriber can cancel an agreement without incurring an early termination fee.In addition, the defendant must provide a refund or credit to subscribers who return invalid leads within two business days of receipt.