Karen Chao, CPO at Nobul, thinks that “Nobul is the world’s only open, digital, customer-centric marketplace connecting individuals who want to complete real estate and related transactions with the best service providers for them.” Nobul is a clear-cut example of a price-fixing scam between licensed brokers.
Nobul operates as a “shell” or a “hub” paper broker that enters into thousands of blanket referral and price fixing agreements with other “spoke” brokers. The platform works with a limited pool of Referral Agents willing to pay a significant part of their commission to Nobul. This blanket referral fee is unlawful and is back-loaded into Referred Agent’s agreement, instead of being handed to the consumer directly. The consumer technically does not pay Nobul, but she ends up with a higher cost of commissions when working with their Referred Agent. Nobul scheme primarily operates in Canada and United States.
Federal Trade Commission’s and the U.S. Department of Justice’s ability to identify and prosecute collusion between licensed brokers in the housing sector remains a crucial element to disrupt such collusion schemes in scale.
Otherwise, the “real estate will remain an inefficient market that lacks the transparency and accountability to serve consumers honestly and ethically” where schemes such as this one produce the “appearance” of competition by means of consumer allocation and price fixing between licensed brokers scaled on the Internet. Why? To sell any “hooked” consumer to a random broker in exchange for massive commission kickbacks paid from a home sale or a home purchase.
#antitrust #kickbacks #consumerallocation #shermanact #ftcact #respa #realestate #proptech David Schwartz Jiyoon Chung Philippe Troin Regan McGee U.S. Department of Justice Competition Bureau Canada Federal Trade Commission