REAL ESTATE SERVICES: Home Buying Company Caught in TCPA Class Action Loses Effort to Dismiss Marketing Claim
Friday, September 15, 2023
Offer to buy home marketing TCPA

Still some ongoing debate around whether an offer to buy a home constitutes marketing for TCPA purposes.

If it is not marketing then there can be no DNC claim.

The Court in Helfrich v. Raven3, 2023 WL 5956221  (S.D.N.Y. Sept. 13, 2023) concluded that such calls CAN constitute marketing, at least where the purpose of the call is to profit from the sale of a home buying service.

In Helfrich the Defendant allegedly made cold calls to home owners asking if they were interested in selling their home. If so the consumer would be connected with an interested buyer who might pay cash for the home or otherwise help the home owner to quickly sell–presumably at a below-market price.

The Defendant in Helfrich moved to dismiss arguing–correctly–that a mere offer to buy cannot constitute marketing. Marketing requires a party to have offered a good or service for sale or rent. So buying something is not marketing.

The Helfrich court disagreed and–weighing in on the age old debate–concluded that offering a home service is offering a service. And, unfortunately, the Court did not address the second piece of the formulation-that the service must be “for sale or rent.” Instead the court concluded:

Defendant allegedly called Plaintiff and other homeowners without their consent and left pre-recorded voice messages offering to buy their homes. (Compl. ¶¶ 18-21). Defendant’s argument that these calls and pre-recorded voice messages merely “encouraged the selling of property, goods, or services” is not persuasive given the nature of its business and is contrary to the allegations made in the Complaint. (Def. Br. at 6). Indeed, Defendant’s website refers to sellers as “client[s]” and promotes itself as providing benefits to sellers such as elimination of paperwork, time, and fees required to sell a house through a real estate agent. (See Raven3 About Us Webpage). Therefore, Plaintiff has plausibly pled that Defendant’s calls and pre-recorded voice messages advertise the commercial availability of its house-buying service and constitute advertisements within the meaning of the TCPA. Defendant for its part has offered nothing, at this stage of the litigation, for the Court to conclude to the contrary.

So there you go.

Notably the calls at issue were prerecorded so it does not matter whether they were marketing or not–prerecorded calls are automatically and ALWAYS subject to the TCPA’s consent rules, at least when made to a cell phone. No marketing content required.

Couple of take aways here:

  1. Courts continue to struggle with the “an offer to buy is not marketing” rule. So watch out;
  2. Cold calls of any kind are likely to draw lawsuits–especially PRERECORDED cold calls. Don’t do it!;
  3. Folks offering to buy houses for cash have seen a big uptick in litigation recently. Be cautious with your process and thoughtful about how you are engaging in outreach.

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