Thinking of cold calling expired listings? Careful — doing so may land you in legal hot water.
Austin-based real estate franchisor Keller Williams Realty is the latest real estate company to be hit with a proposed class-action lawsuit alleging its agents made unsolicited, prerecorded and autodialed calls to consumers without their consent — including calls to consumers registered on the national Do Not Call registry — in violation of the Telephone Consumer Protection Act (TCPA).
The July 2 complaint, filed in U.S. District Court for the Middle District of North Carolina, was submitted by a local attorney, Ted Lewis Johnson of Greensboro, North Carolina, as well as attorneys Stefan Coleman and Avi R. Kaufman of Miami.
Coleman and Kaufman are part of the team of attorneys that sued NRT LLC and Coldwell Banker Real Estate LLC, subsidiaries of real estate giant Realogy, in April, also alleging violations of the TCPA for agent cold calls. Other real estate companies were also sued in March and April for alleged violations of the TCPA in regards to text message spam.
The National Association of Realtors has identified TCPA lawsuits as one of the major legal issues its members should keep in mind in the near term, noting that a lot of “trolling” law firms see violations of the TCPA as “low-hanging fruit.” The trade group advised its members to obtain written consent from consumers before texting them, to avoid using autodialers without consent and to scrub phone numbers in their contact database against the DNC registry.
Although calling expired listings is a time-honored way to drum up business in real estate, being on the receiving end of such calls is not always welcome. Exasperated homeowners sometimes even get local authorities involved to stop the seemingly endless stream of agent calls.
In the latest complaint, Winston-Salem, North Carolina, resident and homeseller Brian Hayhurst alleges Keller Williams’ marketing plan for its agents resulted in at least three unsolicited, autodialed and prerecorded calls from Keller Williams agents to his personal cell phone after his property listing expired on the local multiple listing service (MLS) on May 31.
Hayhurst had previously listed his property with a RE/MAX agent and the KW agents were trying to get him to relist the property with Keller Williams, according to the complaint. Hayhurst has had his cell number on the DNC list since 2003 and said he did not give any prior express consent to receive these calls.
“Keller Williams’ marketing plan directs realtors to use certain prescribed practices to market Keller Williams’ realty services, including unsolicited, prerecorded and autodialed calls to cellular telephone numbers and other telephone numbers registered on the DNC,” the plaintiff’s attorneys wrote in the complaint.
The complaint alleges “a key component” of KW’s agent marketing plan has been for its agents to buy lists of potential leads for listings from lead provider companies such as Landvoice Data or RedX, which generate personal phone numbers associated with expired MLS listings, including phone numbers registered on the DNC Registry, and which provide a web-hosted autodialer for agents to make marketing calls en masse to those numbers without the recipients’ consent.
One of the KW agents who called Hayhurst said she obtained his phone number through RedX.
“In fact, Keller Williams’ marketing plan for franchisees — involving purchasing lists of leads and autodialing them — is reinforced at the highest levels of Keller Williams’ organization,” the complaint states.
It goes on to say, “Dianna Kokoszka, CEO of KW MAPS Coaching at Keller Williams, who coteaches training classes with Keller Williams founder Gary Keller, developed an entire training program called BOLD (Business Objective: A Life by Design) centered around obtaining Landvoice generated leads and autodialing them, which Keller Williams claims ‘has helped tens of thousands’ of its agents. In fact, Keller Williams agents who sign up for BOLD are given a free trial account with Landvoice.”
The complaint cites numerous Keller Williams training videos that encourage and teach agents to call expired listings and For Sale By Owner (FSBO) listings, including one that inaccurately tells agents that it’s ok to solicit a FSBO listing even if the number is on the DNC list. (Agents may only call such numbers to inquire about the property for their buyer client, not to solicit the listing.)
“The problem with services like Landvoice and RedX are that by their nature agents are calling consumers who did not ask to be called and when multiple realtors subscribe to these services, property owners are bombarded with multiple calls from real estate agents soliciting them to relist their property with them,” the complaint says.
It continues, “Consumers are fed up with the harassment of receiving these calls that they did not consent to.”
In an emailed statement, Keller Williams spokesperson Darryl Frost told Inman, “While we have yet to be formally served with this class action lawsuit, we typically do not comment on pending litigation and have nothing further to add.”
The complaint, which demands a jury trial, seeks a minimum of $500 in damages and up to $1,500 in damages, for each violation of the TCPA for each member of the proposed class, which the complaint says could include thousands of people. The complaint also seeks an award of actual and/or statutory damages and costs and an injunction requiring KW “to cease all unsolicited calling activity.”
This is not the only lawsuit calling into question how Keller Williams trains its 160,000 or so agents. Last month, a lawsuit accusing KW and other real estate companies of violating the Sherman Antitrust Act points to Keller Williams training scripts as evidence that KW steers buyers away from listings offering low commissions and discourages sellers from offering lower buyer broker commissions because of steering, thereby keeping buyer broker commissions at a standard level of around 3 percent.
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