Could your lead-gen and referral practices face FTC scrutiny? Senators want a closer look

U.S. Senators Elizabeth Warren (MA-D) and Cory Booker have sent a letter to Federal Trade Commission (FTC) Chair Andrew Ferguson asking him to investigate “deceptive practices in the online real estate marketplace” that they argue are exacerbating the housing affordability crisis. In a letter sent on Thursday and obtained and verified by HousingWire, the senators argue that dominant digital real estate platforms and large brokerages are using their market power to increase fees, commissions and borrowing costs for buyers while reducing transparency in how homes and mortgage referrals are marketed. According to the senators, the “contact agent” buttons on listing platforms that appear to connect a buyer with the listing agent but instead may route inquiries to platform-affiliated buyer agents who remit a portion of their commission back to the platform, are a main part of this alleged problem. They claim that these commission-sharing, referral arrangements are not disclosed to buyers, leaving consumers unaware that a share of their payment is effectively funding the platform’s referral network. The senators say that this could potentially cause higher sale prices or fees. The letter...