Opendoor to pay $62 million to settle FTC claims it misled home sellers

Opendoor to pay $62 million to settle FTC claims it misled home sellers

Opendoor Applied sciences Inc. agreed to pay $62 million to the Federal Commerce Fee to settle allegations that it misled potential house sellers in its advertising and marketing campaigns.

The fee alleged that Opendoor, which makes use of software program to purchase properties from customers after which put the properties again up on the market, tricked prospects by promising they may make more cash by promoting to the corporate than they might on the open market, based on an announcement Monday. The corporate agreed to pay $62 million to the fee.

Opendoor’s inventory fell 2.4% to $4.79 on Monday.

Opendoor pioneered the mannequin, often called ibuying, and competed with Zillow Group Inc. till the web itemizing big exited the enterprise final 12 months.

The FTC said in its statement that Opendoor’s presents on homes have been beneath market worth on common, whereas its prices have been sometimes greater than what a traditional shopper would pay for an actual property agent.

As a substitute, most individuals who bought to Opendoor made 1000’s of {dollars} lower than they might have made promoting their properties utilizing the standard course of, the FTC mentioned.

“Opendoor promised to revolutionize the actual property market however constructed its enterprise utilizing old style deception about how a lot customers might earn from promoting their properties on the platform,” Samuel Levine, director of the FTC’s bureau of shopper safety, mentioned within the assertion.

Opendoor mentioned in a separate statement that the allegations raised by the FTC goal advertising and marketing that the corporate has since modified.

“Whereas we strongly disagree with the FTC’s allegations, our resolution to settle with the fee will enable us to resolve the matter and concentrate on serving to customers purchase, promote and transfer with simplicity, certainty and pace,” the corporate mentioned.

The FTC mentioned the $62 million is anticipated for use to repay customers who have been harmed by the alleged Opendoor practices.

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