InfoBytes Blog
FTC final order fines company $62 million for misleading potential home sellers
On October 21, the FTC announced the approval of a final order against an online home buying firm accused of allegedly making misleading claims to consumers about how much money they could save by selling their home through the company’s services as opposed to selling on the open market. As previously covered by InfoBytes, the FTC claimed the company violated the FTC Act by, among other things, misrepresenting: (i) market value prices when making offers to buy homes by including downward adjustments to such values; (ii) the manner in which it made money on transactions; (iii) that consumers likely would have paid the same amount in repair costs whether they sold their home through the company or in traditional sale; and (iv) that consumers paid less in costs. The final order requires the company to pay $62 million, which is expected to be used for consumer redress, and prohibits the company from making deceptive, false, and unsubstantiated claims about how much money consumers will receive for their homes or the costs required to use the company’s service. Additionally, the company is required to have “competent and reliable evidence to support any representations made about the costs, savings, or financial benefits associated with using its service, and any claims about the costs associated with traditional home sales.”