Lawmakers Ask FTC to Review 'Deceptive' Referral Practices on U.S. Portals

Zillow has been named in a letter penned by American lawmakers urging the Federal Trade Commission (FTC) to call for extra scrutiny into alleged deceptive referral practises at major real estate platforms.

Reps. Jennifer McClellan and Don Beyer sent a letter to the FTC on May 29 requesting an investigation into real estate platforms' referral practices and a review of whether consumer protection measures ought to be renewed. Zillow is the only real estate portal to be namechecked in the letter, cited in a footnote, with the Democrat lawmakers flagging several allegations in line with a string of lawsuits brought against the portal operator in the past year.

According to McClellan and Beyer's letter:

Deceptive or insufficiently transparent internet advertising and solicitation practices may be steering consumers in ways that are not readily apparent, [potentially influencing] a buyer's choice of agent or lender without clear disclosure of underlying financial relationships or compensation structures. [This raises] concerns regarding rising housing costs and the potential role that certain practices in the online real estate marketplace may be playing in increasing costs for prospective homebuyers.

McClennan, a Democrat from Virginia, said:

"The skyrocketing cost of living in this country has only put home ownership further and further out of reach for the American people. Deceptive and non-transparent advertising practices in the online real estate marketplace make this worse by creating greater confusion, frustration or disillusionment with the process.

"As prospective homeowners struggle to find quality housing that they can afford, I joined Congressman Beyer to send a clear message to the Federal Trade Commission: we can and should do more to give people the tools and support they need to fulfill the American dream of owning a home."

In the Taylor case filed in September 2025, a consumer filed a lawsuit against Zillow over its Flex referral program, alleging that Zillow 'tricks' buyers into signing on with a Zillow-sponsored agent to complete their home purchase, with Zillow pocketing up to 40% of commission income from a successful transaction if the agent is enrolled in the Flex program.

Zillow will rightly point to its own terms and conditions, which do not require any consumer to work with any specific agent, as a more than sufficient defence against these claims: "buyers remain free to choose anyone they prefer," said the company in a previous statement. Zillow is seeking a dismissal in the Taylor case, saying, "This lawsuit mischaracterises how our business works and fails to show any wrongdoing."