Whatever the scheme, the CFPB is having none of it. Said Chopra: “These platforms produce results that are rigged ... Instead of being neutral referees, (they) extract illegal kickbacks to steer shoppers towards more expensive or lower quality lenders.”
The move to rein in manipulating digital mortgage comparison-shopping platforms is part of a broader, all-of-government effort to end the illegal biasing of ostensibly neutral platforms.
As part of this effort, the CFPB also has taken steps to combat fake reviews on digital platforms. A year ago, it issued policy guidance that companies posting fake or positive reviews or falsifying customer ratings may be a violation of the Consumer Financial Protection Act.
The FTC, too, has advised companies that, if they use endorsements to deceive consumers, the consumer watchdog agency will be ready to hold them responsible “with every tool at its disposal.” In particular, it is looking at contractual “gag” clauses that attempt to silence consumers from posting an honest online review.
In mid-February, the agency came down on the Bountiful Co., makers of Nature’s Bounty vitamins and supplements, for “hijacking” a feature on Amazon to deceive consumers into thinking the firm’s latest products had more ratings and reviews and higher average ratings and earned such badges as No.1 Best Seller.
The case has nothing to do with the mortgage sector, except this is the kind of thing regulators are looking for. So, lenders, brokers, realty pros and everybody else in the housing food chain should take notice: Uncle Sam is on the prowl, protecting consumers in every way it can from unscrupulous behavior.
While we’re on the topic, I’d like to point out a couple of other shady practices that don’t appear to be on the Fed’s radar screens but perhaps should be. One involves buying leads from Zillow and other sites that aggregate listings from multiple listing services throughout the country; the other regards leads purchased from national and regional credit firms.
Unbeknownst to most consumers, when they click on a listing on an aggregator’s site, the name that often pops up on that property is not the listing agent. Rather, it’s from a rival who has paid the site to be linked to the listing, even though the agent likely knows nothing about the house in question. Or certainly has a lot less knowledge of it than the actual listing agent. He may not even be in the same general vicinity.
The other day, I noticed a nearby house for sale in which I had some interest, so I clicked on the “appointment” box, whereupon I was immediately asked when I would be ready to buy. I clicked right away. Within a few moments, the phone rang. After asking a few questions, the person on the line said she would connect me with a buyer’s agent.
(As used here, buyer’s agent is something of a misnomer. What they really mean is a buy-side agent who may or may not be working in the buyer’s best interest as opposed to a true buyer’s agent or broker, who never takes listings and solely and always works on behalf of buyers.)
That’s when I realized I didn’t have the listing agent. I had Zillow, which was ready to hand me off to someone other than the listing agent. When the lady confirmed my suspicions, I told her I wanted the lister and no one else. Politely, she gave me the agent’s name and number.
Then, within 15 minutes or so, I received a call from an agent who wanted to talk with me about the listing. But she wasn’t the listing agent, either. She had paid Zillow to be notified when someone inquired about a property in her marketing sphere. I had been passed off — and pissed off — anyway.
Never was I asked if I was working with an agent. Fortunately, I recognized what was going on, but most consumers aren’t as savvy. If they aren’t careful, they could be turned over to an agent with no experience, an agent who doesn’t know how to secure clients on his own, or one who is too lazy to do so.