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REAL ETHICS by Steve Stazel | June 2007 | Index of all Real Ethics columns
Two new cases from NAR address Internet advertising
This month’s article discusses two new case studies that relate to Internet advertising.
Do you have a website? If you do, this article applies to you. Both of these cases fall under Article 6 which states in part that “When recommending real estate products or services...REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees...the REALTOR® may receive.” I will try to combine both cases into one article.
In both cases, the REALTORS® (whom we will call X & Z) contacted providers of services that home buyers could have a need to use. The people contacted included financial institutions, title companies, home inspectors, mortgage brokers, insurance agencies, appraisers, exterminators, decorators, landscapers, moving companies, and other providers of services and were offered advertising on the REALTORS®’ websites. In both cases, the REALTORS® required a fee be paid to them each time a consumer “clicked through” from the REALTORS®’ sites to an advertiser’s site.
Ads for providers of real estate-related products and services who agreed to REALTOR® Z’s terms appeared on the home page under the heading “Preferred Providers.” Immediately under that heading read this statement: “These vendors provide quality goods and services. Please patronize them.”
Advertisers of real estate-related products and services who agreed to REALTOR® X’s terms received no endorsements on the website.
In separate cases, both of the REALTORS® were charged with a violation of Article 6. REALTOR® Z was found to be in violation of the Code. The hearing panel found that a reasonable consumer would certainly conclude that referring to a provider of real estate-related products or services as being “preferred” by a REALTOR® constituted a recommendation or endorsement. Further, since REALTOR® Z received a fee each time a consumer “clicked through” to one of REALTOR® Z’s “preferred providers,” REALTOR® Z received a referral fee, and disclosure of that fee was required under Article 6.
In the charge against REALTOR® X, the hearing panel found no violation. The hearing panel agreed with REALTOR® X that the mere presence of real estate-related advertisements on REALTOR® X’s website did not constitute a “recommendation” or “endorsement” of those products or services. The panel found that the ‘click through” fee that REALTOR® X earned when visitors to his website linked to certain advertisers’ sites was not the type of financial benefit or fee that must be disclosed under Article 6.
If you would like to read these cases, they are Cases 6-5 & 6-6 in the Code of Ethics and Arbitration Manual.
Each month, the Aurora Association of REALTORSŪ Web site features Real Ethics,
a column by Steve Stazel devoted to explaining Code of
Ethics issues for members. A REALTORŪ since 1974, Stazel is a Professional Standards
instructor and senior Ethics
instructor for the Colorado Association of REALTORSŪ.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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