Zillow RICO Lawsuit, Court Consolidates Cases, Expands Allegations of Mortgage Steering and Illegal Kickbacks

A Seattle federal judge consolidated two class action lawsuits against Zillow on December 10, 2024, merging Taylor v. Zillow and Armstrong v. Zillow into one case alleging RICO violations and illegal kickbacks. The amended complaint filed November 19, 2024 accuses Zillow of racketeering, fraudulent business practices, and steering homebuyers to Zillow Home Loans through its Flex and Premier Agent programs. The case is 2:25-cv-01818 in the U.S. District Court for the Western District of Washington. Plaintiffs seek up to $25,000 per class member, claiming hundreds of millions if not billions in damages from alleged RESPA and racketeering violations.

What Is the Zillow RICO Lawsuit About?

The Taylor lawsuit was initially filed in September 2024 focusing on Zillow’s Flex referral program, then expanded November 19, 2024 to include RICO claims. The Armstrong lawsuit was filed November 7, 2024, alleging Zillow used illegal kickbacks to boost its mortgage business.

The lawsuits challenge three core practices:

• Deceptive lead routing: Homebuyers clicking “Contact Agent” or “Request a Tour” believe they’re contacting the listing agent but are routed to Zillow Flex agents who pay Zillow a 40% referral fee
• Mortgage steering: Zillow allegedly forces Flex agents to refer customers to Zillow Home Loans, violating agents’ fiduciary duties and RESPA
• Coordinated enterprise: The RICO allegations claim Zillow works with real estate brokerages as an “enterprise” using deceptive digital funnels and undisclosed fees to inflate commissions

What Are the Specific RICO Allegations?

The complaint alleges Zillow, along with three real estate agencies and unnamed co-conspirators, violated RICO by working together as an enterprise and using mail in furtherance of their fraudulent scheme.

Named brokerage defendants include:

• Works Industries LLC (Oregon)
• GK Properties (Nevada)
• The Frano Team (Florida)

The RICO claims frame Zillow’s alleged practices as a coordinated effort rather than isolated violations, arguing the company and participating brokerages use deceptive tactics to keep commissions high and inflexible.

The alleged racketeering pattern includes:

• Fraudulently inducing homebuyers into using Zillow Flex agents
• Illegally steering buyers into using Zillow Home Loans
• Pushing loan applicants to apply for more costly loans that don’t serve their best interests
• Using undisclosed fees and scripted sales tactics to maintain inflated commission structures

What Are the Specific RESPA Violations Alleged?

The filing asserts Zillow is illegally both giving and receiving a thing of value related to referrals and receiving payment that’s not in exchange for completing the property transaction.

Specific RESPA violations include:

• Zillow allegedly pressures agents in Premier Agent and Flex programs to steer buyers to Zillow Home Loans for pre-approval
• Agents who send more clients to Zillow’s mortgage arm receive extra or higher-quality leads in exchange
• Agents in the Flex program who fail to send sufficient leads to Zillow Home Loans risk removal from the program
• Multiple Flex agents told investigators they were dropped specifically because they recommended lenders who better served their clients’ needs

What Evidence Do 12 Confidential Witnesses Provide?

The amended complaint includes testimonies from 12 confidential witnesses described as current and former Zillow Flex agents and loan officers.

Their allegations include:

• Zillow managers allegedly travel to offices to personally deliver instructions they could not put in writing about quotas
• Zillow loan officers frequently misrepresent or omit important details about borrowers’ true closing costs, leading buyers to pay excessive costs or lose the house
• Zillow Home Loans cherry-picks only the most qualified borrowers because loan officers are inexperienced, underpaid, and incentivized to churn borrowers without regard for clients’ interests
• Zillow’s requirement that Flex agents use Follow-Up Boss allows Zillow to eavesdrop on communications between agents and buyers, violating the agent’s duty of confidentiality
• Zillow uses Follow-Up Boss to catch Flex agents who may recommend other loan providers to their clients
• Around 2022 or 2023, Zillow began setting quotas for Flex agents and teams for referrals to Zillow Home Loans
• Many Zillow Flex agents know virtually nothing about the real estate process or the neighborhoods where they show homes, yet are falsely promoted as Top Agents based solely on their participation in Zillow Flex

What Are the Most Recent Legal Developments?

September 2024 – Taylor Lawsuit Filed

The initial Taylor complaint focused on Zillow’s Flex referral program, alleging violations of the Washington Consumer Protection Act and RESPA.

November 7, 2024 – Armstrong Lawsuit Filed

Armstrong v. Zillow Group was filed alleging kickback schemes where Zillow hands over valuable customer leads relative to the number of customers agents sent to Zillow Home Loans.

November 19, 2024 – Amended Complaint Adds RICO Claims

The amended Taylor complaint expanded from 29 to 73 pages, adding 10 plaintiffs across eight states and adding Zillow Home Loans plus three real estate brokerages as defendants.

December 10, 2024 – Court Consolidates Cases

U.S. District Judge James L. Robart granted plaintiffs’ request to merge the Taylor and Armstrong cases, concluding they involve substantially similar allegations and overlapping proposed classes. The judge wrote consolidation would enhance fairness to all parties and aid in achieving efficiency and economy in what is likely to be expensive and complicated litigation.

Next Steps

Once the court rules on an interim counsel motion, plaintiffs are expected to file their consolidated complaint within two weeks.

Who Filed the Lawsuit and Who Are the Parties?

Lead Plaintiff (Taylor case): Alucard Taylor, Washington homebuyer

Named Plaintiffs: 10 plaintiffs across California, Connecticut, Florida, Georgia, Michigan, Nevada, North Carolina, Oregon, Virginia, and Washington

Specific Named Plaintiff: Rebecca Brucaliere (Norwalk, Connecticut)

Defendants:

• Zillow Inc.
• Zillow Group, Inc.
• Zillow Homes Inc.
• Zillow Listing Services Inc.
• Zillow Home Loans, LLC
• Works Industries LLC (Oregon brokerage)
• GK Properties (Nevada brokerage)
• The Frano Team (Florida brokerage)

Plaintiffs’ Legal Team: Hagens Berman Sobol Shapiro LLP, led by Steve W. Berman (same firm that represented plaintiffs in the Moehrl commission lawsuit that resulted in over $1 billion in settlements from NAR and major brokerages)

Presiding Judge: Hon. James L. Robart (consolidated case), U.S. District Court for the Western District of Washington

Case Number: 2:25-cv-01818

What Is Zillow’s Response?

Zillow issued a statement saying: “The claims in this lawsuit are false and fundamentally mischaracterize how our business operates. Zillow is built around empowering consumers with information and choice, and our programs reflect that commitment”.

A Zillow spokesperson stated: “Our approach prioritizes transparency and consumer choice, ensuring consumers receive the information and services they want and ask for at the right time throughout their real estate journey”.

Zillow clarified there are a number of factors it considers and several requirements an agent must meet to be part of the Zillow Flex program.

Zillow has firmly denied the claims, saying its programs comply with RESPA and that the lawsuits mischaracterize common industry practices.

Who Is Affected by This Lawsuit?

Directly Affected:

• All persons in the United States who were referred to Zillow Home Loans by a Participating Agent and obtained a mortgage loan from Zillow Home Loans in connection with purchasing residential property
• Homebuyers who clicked “Contact Agent” or “Request a Tour” on Zillow and were routed to Flex agents
• Homebuyers who used Zillow Flex agents to purchase homes
• Homebuyers who scheduled home tours through Zillow.com
• Homebuyers who used Zillow Home Loans for mortgages

Potentially Affected:

• Real estate agents participating in Zillow’s Flex or Premier Agent programs
• Independent mortgage lenders competing with Zillow Home Loans
• Future homebuyers using Zillow’s platform for property searches

Specific Case Example:

Rebecca Brucaliere bought a home in Norwalk, Connecticut in 2023 using a Zillow agent identified as H.D., likely a Flex agent. The lawsuit says Brucaliere didn’t feel she had any choice but to use H.D. as the buyer’s agent, and H.D. urged her repeatedly to use Zillow Home Loans though she wanted to use USAA. Although Brucaliere was a first-time homebuyer, H.D. never told her about first-time homebuyer assistance programs, which she ultimately obtained through USAA.

What Damages or Relief Are Being Sought?

Plaintiffs seek up to $25,000 per class member.

Plaintiffs claim hundreds of millions if not billions in harm from alleged violations of RESPA and racketeering laws.

The lawsuit seeks:

1. Monetary damages for all class members who were steered to Zillow Home Loans
2. Injunctive relief stopping Zillow’s alleged illegal referral and steering practices
3. Treble damages under RICO statutes (triple the actual damages)
4. Attorney’s fees and costs
5. Changes to Zillow’s business practices to ensure transparency and eliminate conflicts of interest

What Is the Current Status of the Case?

On December 10, 2024, Judge Robart consolidated the Taylor and Armstrong cases.

Consolidation reduces duplication, focuses discovery, and ensures rulings apply consistently across all proposed plaintiffs.

The consolidated case will now proceed through:

1. Filing of consolidated complaint (expected within two weeks of interim counsel motion ruling)
2. Likely motions to dismiss from Zillow
3. Discovery phase
4. Class certification battles
5. Potential trial or settlement negotiations

For Zillow, consolidation means defending a single, more comprehensive case rather than two parallel complaints. For plaintiffs, consolidation creates a broader class and a clearer litigation strategy heading into the next phase.

What Should Affected Consumers Do?

For Homebuyers Who Used Zillow Services:

1. Review your transaction documents – Check if you were routed to a Zillow Flex agent and whether you used Zillow Home Loans
2. Document your experience – Keep records of communications with your agent, loan documents, and closing costs
3. Compare mortgage terms – Determine if you could have obtained better loan terms elsewhere
4. Consult legal counsel – Contact the plaintiffs’ attorneys to determine if you qualify as a class member
5. Preserve evidence – Save all emails, texts, and documents related to your home purchase and mortgage

For Real Estate Agents in Zillow Programs:

1. Review program agreements – Understand your obligations and any quotas for Zillow Home Loans referrals
2. Document pressure tactics – Keep records of any instructions to steer clients to Zillow Home Loans
3. Know your fiduciary duties – Consult an attorney about your legal obligations to clients
4. Consider whistleblower protections – Attorneys may be seeking additional witnesses
5. Evaluate program participation – Assess whether continued participation conflicts with your professional obligations

For Future Homebuyers:

• Ask explicitly if your agent is part of Zillow’s Flex program and what fees they pay
• Request disclosure of all referral fees and commissions
• Get mortgage pre-approval from multiple lenders, not just Zillow Home Loans
• Ask your agent about alternative lenders and compare rates independently
• Understand your rights under RESPA to choose your own service providers

What Similar RICO and RESPA Cases Exist?

Hagens Berman is the same firm that represented plaintiffs in the Moehrl commission lawsuit that resulted in over $1 billion in settlements paid by NAR and major brokerages.

The Zillow RICO lawsuit follows similar patterns:

• Allegations of coordinated schemes to inflate costs
• Claims of deceptive business practices harming consumers
• RESPA violations involving undisclosed referral fees
• Class action structure seeking broad consumer relief

Other current Zillow litigation:

• Compass filed an antitrust lawsuit in June 2024 challenging Zillow’s listing access standards
• CoStar filed a copyright infringement lawsuit in July 2024
• The FTC filed an antitrust lawsuit September 30, 2024 against Zillow and Redfin over rental advertising market consolidation
• Five state attorneys general (Virginia, Arizona, Connecticut, New York, Washington) filed a similar antitrust suit

What Could This Mean for Real Estate Industry Accountability?

The consolidated RICO case could establish new standards for:

Platform Transparency:

• Requirements to disclose referral fees and agent affiliations upfront
• Clear identification of agents’ financial incentives
• Prohibition of deceptive lead routing practices

RESPA Enforcement:

• Stricter interpretation of what constitutes illegal kickbacks in digital platforms
• Enhanced scrutiny of lead generation programs tied to mortgage referrals
• New standards for agent independence when recommending lenders

Industry Practices:

• MLSs may adopt disclosure mandates for referral systems
• Brokerages may face pressure to explain how leads are routed
• Digital platforms may need to restructure commission and referral models

The lawsuit, combined with new NAR delegate votes and CRMLS disclosure mandates, marks a shift toward more explicit transparency in referral systems.

Zillow’s mortgage business has doubled its revenues in the past three years, from $26 million in Q3 2022 to $53 million in Q3 2024, a 36% increase year-over-year.

Frequently Asked Questions

Q: What is the case number for the Zillow RICO lawsuit?

The consolidated case is Taylor v. Zillow, Case No. 2:25-cv-01818, in the U.S. District Court for the Western District of Washington.

Q: When were the Zillow RICO lawsuits filed?

The Taylor lawsuit was initially filed in September 2024, with an amended complaint adding RICO claims on November 19, 2024. The Armstrong lawsuit was filed November 7, 2024. The cases were consolidated on December 10, 2024.

Q: How much compensation could class members receive?

Plaintiffs seek up to $25,000 per class member, with total damages potentially reaching hundreds of millions if not billions of dollars. RICO violations allow for treble damages (triple the actual harm).

Q: Who qualifies as a class member?

The proposed class includes all persons in the United States who were referred to Zillow Home Loans by a Participating Agent and obtained a mortgage loan from Zillow Home Loans in connection with purchasing residential property.

Q: What is Zillow’s Flex program?

Zillow Flex is a referral program where agents pay Zillow a 40% referral fee in exchange for leads. Homebuyers clicking “Contact Agent” or “Request a Tour” are routed to these Flex agents rather than the listing agent.

Q: What does RICO stand for and why does it matter?

RICO stands for Racketeer Influenced and Corrupt Organizations Act. RICO allegations claim Zillow and participating brokerages constitute an “enterprise” using deceptive tactics as part of a coordinated scheme. RICO violations can result in treble damages and criminal penalties.

Q: Has Zillow faced other lawsuits recently?

Yes, Zillow is defending seven lawsuits as of late 2024, including antitrust claims from Compass, copyright infringement from CoStar, FTC antitrust charges, and employment discrimination claims.

Q: What is RESPA and how does it apply?

The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks and referral fees in real estate transactions. The lawsuit alleges Zillow is illegally both giving and receiving things of value related to referrals in violation of RESPA.

For official court documents, consult PACER (Public Access to Court Electronic Records) using case number 2:25-cv-01818. Affected consumers should contact Hagens Berman Sobol Shapiro LLP for information about joining the class action.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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