FTC: Opendoor Must Pay $62 Million For Deceptive Advertising

On October 21st, 2022, the Federal Trade Commission (FTC) announced that it has finalized a consent order against Opendoor Labs, Inc. Opendoor is an online-company that buys and sells residential real estate. The company will pay approximately $62 million to resolve false advertising allegations. A significant portion of the funds obtained by the FTC is expected to go towards compensating the affected consumers. Here, our Miami deceptive & unfair trade practices attorney provides an overview of the enforcement action from the FTC and explains the standard for deceptive advertising in Florida.

FTC Ruling: Opendoor Misled Consumers, Violated False Advertising Laws 

The FTC filed a deceptive advertising complaint against Opendoor Labs, Inc. According to the allegations raised by the FTC, the advertising of Opendoor led reasonable consumers to believe that they could make more money by selling their home (residential real estate) directly to the company instead of listing it on the open market. However, the reality was far different. Indeed, most people who sold their home directly to Opendoor actually made thousands of dollars less than they would have made had they sold their home in a more traditional manner.

Notably, the advertising used by Opendoor consistently emphasized that the company would pay “market value” or its “best estimate of market value.” As part of its complaint against Opendoor, the FTC cited evidence showing that, contrary to its advertising, the company paid sub-market value for the residential real estate that it purchased. The FTC also cited evidence stating that Opendoor’s own internal analysis found that the company was obtaining real estate for less than market value. Based on the totality of the circumstances, the FTC determined that a reasonable consumer would be deceived by the advertising used by Opendoor.

 The FDUTPA Allows Florida Consumers/Businesses to Sue for False Advertising  

For the purposes of false advertising claim, Florida law follows federal law. Florida statutes explicitly state that FTC guidance on deceptive advertising should be used by state courts. However, one important difference between federal law and Florida law is that our state’s FDUTPA provides a private right of action to consumers and businesses affected by false advertising.

You do not have to wait on state regulators to take action against a false advertising case. If you sustained tangible financial harm due to false/deceptive advertising, you have the right to file a lawsuit under the FDUTPA. Through an FDUTPA claim in Florida, affected businesses and consumers can seek compensation for actual damages.

Get Help From a Deceptive Advertising Attorney in South Florida

At Pike & Lustig, LLP, our Florida false advertising lawyer has the skills and experience to handle the full range of deceptive advertising claims under the FDUTPA. If you have any questions about your rights or your options, we are here to help. Contact us now to set up your fully private case assessment. With offices in West Palm Beach, Miami, and Wellington, we handle false advertising claims under the FDUTPA throughout all of Southeastern Florida.

Source:

ftc.gov/news-events/news/press-releases/2022/10/ftc-approves-final-order-against-opendoor-labs-preventing-company-misleading-consumers-about-cost