According to an FTC press release, the Federal Trade Commission fined Opendoor Labs $62 million for deceiving potential property owners into believing they could make more money selling to Opendoor.
According to the news release, Opendoor allegedly sent misleading and deceptive material to potential sellers, and most clients who sold to Opendoor made thousands less than they would have if they used a more traditional technique.
“Opendoor purported to reinvent the real estate industry, but it built its firm on old-fashioned deception about how much customers might profit selling their homes on the platform,” said FTC Bureau of Consumer Protection Director Samuel Levine in a news release. “It’s nothing new to deceive customers.”
When compared to traditional home sales processes, Opendoor, which buys homes directly from buyers, claimed to use cutting-edge technology to generate “market-value” offers while lowering transaction costs, including charts demonstrating that consumers would almost always make more money using the Opendoor service.
According to the FTC release, Opendoor also broke the law by misrepresenting its use of projected market value prices when making offers to buy homes, claiming it made money from fees rather than buying low and selling high, and reporting incorrect savings related to repair costs and selling their homes.
“While we strongly disagree with the FTC’s allegations,” Opendoor said in a statement released on Monday, “our decision to settle with the Commission will allow us to complete the lawsuit and focus on helping consumers buy, sell, and move with simplicity, clarity, and speed.”
