Do You Cold Call Your Leads? (Legal Liability Threat)

If you practice cold-calling to find new business or good real estate leads, then you need to monitor the progress of a class-action complaint filed in California. The complaint, which is similar to another case filed in South Florida, “questions the technology services that are helping real estate professionals gain numbers to call,” warned the National Association of Realtors (NAR) in its Realtor Magazin[1].

The California case is based around a complaint from Jorge Valdes. He has asked the court to stop Coldwell Banker Real Estate and NRT to from directing its real estate professionals to call consumers, claiming it violates consumer rights under the Telephone Consumer Protection Act (TCPA). The act limits when solicitors may call consumers, how they can reach them (i.e. not via autodialing), and how consumers may register for do-not-call lists or opt out of the phone calls. The lawsuit alleges that the calls are unsolicited and automatically dialed, putting them in violation of the Federal Trade Commission (FTC)’s National Do Not Call Registry.

Valdes claims he received autodialed calls from three different real estate professionals to his cell phone number, which is registered with the Do Not Call list. He noted his home was listed on the MLS in 2018 but removed when the home did not sell and added his cell phone number was never associated with public information about the policy. The class-action lawsuit extends to “anyone who also received unsolicited calls over the past four years” from Coldwell Banker Real Estate and NRT. Valdes is seeking at least $500 in damages, a jury trial, and up to $1,500 for each violation. The real estate companies have simply responded, “We received the lawsuit and are evaluating. As consistent with our policy, we will not comment further on pending litigation.

Automated Texting Up for Judgment Also

While Valdes’ complaint deals with unwanted phone calls, two brokerages in Southern Florida face litigation over automated texting services used to market their properties. Two plaintiffs have filed complaints against a Coldwell Banker brokerage and Marzucco Real Estate, both of which stand accused of “misuse of texting for advertising” in violation of federal antispam laws[2].

Plaintiffs complained of texts asking for email addresses in order to “get your home sold within 60 days” and texts inviting them to open houses at specific properties. Text messages were linked to agent websites and bios. At least one plaintiff alleged the technology used to send the texts was the problem, identifying “Listings-to-Leads” as the culprit. While Listings-to-Leads responded firmly that its technology “does not spam other people’s phones,” the founder, Scott Pierce, warned agents using “five, six, seven programs” in conjunction could put themselves at risk. He added, “Just because [the service] offers it doesn’t mean you can abuse it. You can’t take technology and abuse it and wonder why you’re getting sued.” Pierce suggested most agents “probably never took the time to see what the law is” regarding automated calls and marketing texts[3].

A Threat to Direct-to-Voicemail Services as Well

Investors often opt to get around perceived issues with TCPA by using direct-to-voicemail services, which allow them to leave a message on a voicemail without causing the phone to ring. However, this use of the technology is not foolproof, since other violations conducted using direct-drop voicemail systems are still violations. Last year, a U.S. District Court in Michigan ruled that leaving voicemail messages without going through the initial call process still constituted a phone call and required the recipient of the call’s consent[4]. It is likely based on this ruling, which included texts under the category of “calls,” will serve as a precedent for the South Florida cases as well. If you use ringless voicemail in your lead generation, most services recommend you use it to reach individuals who have first contacted you[5].

Tell us what you think:

  • Do either of these cases have merit in your opinion?
  • Would you use this type of marketing in your business?
  • How do you ensure compliance with TCPA in your real estate transactions?

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[1] https://magazine.realtor/daily-news/2019/04/08/cold-calling-in-real-estate-under-fire-in-new-lawsuit

[2] https://magazine.realtor/daily-news/2019/04/05/lawsuit-filed-over-thousands-of-text-messages-promoting-listings

[3] https://therealdeal.com/miami/2019/04/04/unsubscribe-resi-brokerages-sued-over-text-message-spam/

[4] https://www.hudsoncook.com/article/direct-drop-voicemail-service-subject-to-tcpa/

[5] https://helloalex.io/real-estate-agents-can-convert-cold-leads-ringless-voicemails/

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