We found – 4 articles for information fiduciaries

From #FakeBuyerAgents to Smart Disclosures & Information Fiduciaries

IMG_1705The official minutes are now online but they reveal little about the process or substance of the revised Agency Disclosure form in Massachusetts. As cited in complaints to the Attorney General’s Office and repeated follow-up with the Mass Office of Consumer Affairs (see excerpt and image above), the mandatory form was updated by a group of industry insiders who met at the Mass. Association of Realtors.  Here’s our recap of the board meeting nearly five months ago and our vision for an “Agency Revival.”

PUBLIC COMMENT:

Asked if the RE Board had received comments from the Mass. Association of Buyer Agents (MABA) and the attorney Charles Kilb, said no. Said dozens of peers at MABA had collaborated during 1992 – 1993 to shape the original disclosure, and since they could not be here because of the weather wanted to address MABA’s two main concerns:

MABA Talking Points

1. MABA called for a formal, public comment period including a public hearing, so licensees, consumer advocates, as well as buyers and sellers could comment.

There was no response from the RE Board.

2. Graphically the choice of Designated Agency versus Non-Designated Agency now appears to be the focal point of the disclosure and is misleading.  By framing the undivided loyalty of real buyer agency as a negative (non-Designated Agency), the obvious conflict of interest in the cartoon below now appears to be highest good.  Beyond user design, added that lawyers in the buyer agency community believe designated agency is act of fraud because only Agency + Loyalty = Fiduciary.

Opposing Teams

Critique as real estate consumer advocate

Moving from MABA’s talking points to my own, showed exhibitor brochures from real estate tech conferences last week in NYC to make the point that real estate vendors collect so much personal data about buyers and sellers that we can no longer wait until the first point of contact OFFLINE to discuss fiduciary duties. In fact, law schools at both Harvard and Yale are already talking about the role of #InformationFiduciary

See http://bit.ly/GrandTrust (share via social media)

For that reason, the revised agency disclosure form is already obsolete because disclosure needs to be made at first point of digital interaction.

Use new graphic tools, if not AI, to create next generation agency disclosure

When I tried to argue that Designated Agency had become the new anchor point for the disclosure, working group chair Peter Ruffini noted that Designated Agency did not exist in 1992 and 1993 when the original agency disclosure process created a consensus document.  Since it’s controversial “passage”  in 2005, designated agency has become the default setting for mega-brokers.

To make the existing form easier for the public to understand, recommended using explainer videos (see one created later by MABA’s President Ronald Huth) and infographics online or on the back of the agency disclosure. To my surprise, Kimberly Allard-Moccia, an industry member of the RE Board, leaned into that comment and smiled approvingly!

After acknowledging that the committee had been asked to update the form based on the existing law, pointed to the Board to the future. Informed them that the National Association of Realtors will host their annual convention in Boston in November 2018 for the first time ever and we have the opportunity to engage the industry in the process, not just updating an old form, but creating an next generation agency disclosure.

Said Massachusetts was rightly proud of the document we created in 1993 and we can once again create a disclosure process which establishes best practices. Said it’s conceivable that chat bots, using artificial intelligence, could administer an online disclosure that results in a consumer who has truly given informed consent because they’ve been led through an interactive conversation that reveals the implications of agency choices.

Chair Kevin Sears received the comments well, thanked me for insights and suggested that I work with attorney Justin Davidson from MAR to move the conversation into the future.

CLOSURE & VOTE:

Sears asked the board attorney to comment on the past 10 minutes, and he said that the agency disclosure’s task had been to work within the existing context set by statute. “From my perspective as a lawyer, you did what you could; followed all of the steps.” Kilb said, “What I’m hearing here is what you might want to do in the future.”

That caused Sears to call for a motion on the revised draft of the form: “All in fair, say, I. All opposed say, no.”  The form was passed without any opposing votes.

Sears closed by thanking me for my comments and suggested I follow-up directly with attorneys Mike McDonough and Justin Davidson of MAR to explore the ideas I presented.

AGENCY REVIVAL IN THE FUTURE?

Pointing to new AI technology that has the possibility to automate parts of the transaction, suggested to the committee that agency duties will become more important in the future.

“If agents don’t want to be displaced by technology, they need to offer fiduciary level services. That could result in an “Agency Revival” and the disclosure needs to reflect the importance of loyalty — real fiduciary duties — not a conflict of interest that’s been papered over or agency fraud.”

Once again, board member Kimberly Allard-Moccia’s body language was that she was intrigued by the idea.

Posted in Buyer agent, Consumer protection, Designated Agency, Dual Agency Detective, Dump Dual Agency, Investigative Reporting, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Tech Trends | No Comments »

WSJ exposes privacy issues in real estate, need for Consumer Bill of Rights

For homebuyers, sellers and homeowners, National Consumer Protection Week (3/3-9/19) started early.  Today, a headline in the Wall Street Journal exposed yet another wave of Facebook privacy violations — this time revealing that Realtor.com sent Facebook “…the location and price of listings that a user viewed, noting which one were marked as favorites.”

Real Estate Cafe has been writing about the need for real estate consumer bill of rightsinformation fiduciaries, and a new deal on real estate data for years but the urgency has never been front page news until today.

Surveillance Capitalism in Real Estate

My hope as a real estate consumer advocate is that this is where the investigative reporting and regulatory responses begin.  Consumers, including millions of house hunters and every household in the nation, would be surprised — maybe shocked — to learn how real estate apps track their personal data and sell them as leads.  In some cases, apps track online behavior and access financial data to score buyer leads.  In other cases, predictive (some would say predatory) apps track data to identify who is most likely to sell.  Most troubling, other apps boast Stalker 2.0 functionality that can track emails of past clients and flag those that are going through some kind of life transition that might become a business opportunity for their clients.

Real estate apps not only track personal data, in-house dashboards used by mega-brokers allow them to see confidential information on both sides of the transaction so they can sell properties before they are listed on the MLS and collect a double payday. Not just sell properties, but potentially manipulate over-eager buyers in BLIND bidding wars.  See the discussion on need for a bidding war backlash.

Hopefully, these practices underline the urgent need to address real estate and smart home use cases in the scope of national privacy legislation being considered by the US Congress.

Need for Information Fiduciaries 

A diagram of Zillow’s “Living database of all homes,” which includes personal data about homebuyers, sellers, renters, and homeowners, shows the massive scope of their empire and raises questions about consumer privacy.  Their aggressive new push into flipping homes complicates that with questions about conflicts of interest.  Both underline the need for disclosures and privacy protections modeled on the European Union’s GDPR — General Data Protection Regulation.

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Over the past two years, RE2020 — an OPEN collaboration site dedicated to cocreating a new money-saving real estate ecosystem — began threads to protect consumers:

1.  Update of the Homebuyer Bill of Rights, #REBillOfRights, originally drafted in 20 years ago;

2.  Extend agency duties beyond the real estate transaction to the need for Information Fiduciaries.

This exchange between Facebook’s Mark Zuckerberg and Harvard Law professor Jonathan Zittrain underlines the need for information fiduciaries:

What we do know is that Mark Zuckerberg seems confused by his own company’s actions. Asked by Zittrain about his pet idea that Facebook be expected to act as a “information fiduciary” where it is morally and legally responsible to look after people’s data in their own interests, Zuck replied: “The idea of us having a fiduciary relationship with the people who use our services is intuitive.”

But he then argued that the company’s “own self-image of ourselves and what we’re doing is that we’re acting as fiduciaries and trying to build services for people.” Which will be news to anyone that has been following Facebook’s concerted and persistent efforts to hide what information it gathers, and what it does with that information.

Zuckerberg even gave an example of what would be going too far: “If you want to talk in metaphors, messaging is like people’s living room, and we definitely don’t want a society where there’s a camera in everyone’s living room.” To which, of course, Zittrain pointed out that Facebook is literally selling a new device, Portal, that is an internet-connected camera for people’s living rooms. Zuck sort-of recovered by noting that his device uses encryption.

Congressional hearing & local events

In less than a week, the US Senate Committee on Commerce will host a public hearing to “examine what Congress should do to address risks to consumers and implement data privacy protections for all Americans.”  Their press release says “In an age of rapid innovation in technology, consumers need transparency in how their data is collected and used.”  That’s like a sports team only playing defense, but an understandable role for regulators.  On the offensive side of the ball, innovators in the private sector will eventually cocreate a real estate ecosystem that empowers consumers to manage and monetize their personal data to save an estimated $30 billion dollars annually.  That part of our call for a “New Deal on Real Estate Data”, aka #NewDealREData

Eager to connect with fellow consumer / privacy advocates who are open to that vision  and want to set the emerging real estate ecosystem on a Real Estate Consumer Bill of Digital Rights.  If the hearing is broadcast on C-Span, want to host a watch party on Feb 27th in Boston, perhaps at Harvard’s iLab or Smith Center in Harvard Square?

http://bit.ly/DataPrivacyHearing (share via social media)

Just learned of an event at Harvard’s Berkman Center on Feb. 26, 12-2pm entitled, Waking Up to the Internet Platform Disaster.  Let’s use that event to revisit how we can use NCPW to expose real estate as the sleeping giant of the consumer movement.

http://bit.ly/DigitalWakeUP (share via social media)


Footnote:  Thanks to Pat Rioux, former Buyer Agent, Listing Entry-Only pioneer in Massachusetts for catching with the tweet below.  Affectionally known among real estate consumer advocates as Ms. Information, Rioux is now a health data expert, and we hope she continues to keep an eye on privacy issues at the intersection of Health & Housing data.  Hope you can see, this is worse than we thought!

 

Posted in Consumer protection, Defensive Homebuying, Dual Agency Detective, HousingID, IntentCasting, Personal data, Privacy, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Tech Trends, VRM | No Comments »

“Consumer, Protect Thyself” with #CustomerTech, Enrich Thyself too

As our flurry of recent blog posts below attests, Real estate is the Sleeping Giant of the Consumer Movement! We tried sharing those links with the National Association of Real Estate Editors before their recent annual convention (#NAREE17) but thus far no one has developed any story ideas.  Requests to meet about our list of 10 issues / real estate consumer complaints were also brushed off by @MassAGO & @Mass_Consumer:

http://bit.ly/MassAGOv3 (share via social media)

In the #DysTrumpian Era of “Consumer, Protect Myself” is #CustomerTech capable of arming homebuyers and sellers with “First Party Terms?” This hard-hitting @CBCMarketplace expose about “real estate agents breaking the rules” points to the importance of that question, and the “Pledge of Allegiance” — a set of terms designed to protect homebuyers — released on Flag Day, June 14:

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BACKGROUND

Recent blog posts, most sent to #NAREE17

In #DysTrumpian era of “Consumer Protect Thyself,” powerful DIY tool for Homebuyers

http://bit.ly/ProtectRESelf (share via social media)

Will Wall Street cause Consumer Advocates to revisit Real Estate Cartel?

http://bit.ly/REvisitCartel (share via social media)

Open Letter to National Association of Real Estate Editors #NAREE17

http://bit.ly/OpenNAREE (share via social media)

From #FakeBuyerAgents to Smart Disclosures & Information Fiduciaries

http://bit.ly/FakEBA2FutureRE (share via social media)

Castle Doctrine: Protecting real estate consumers in DysTrumpian era

http://bit.ly/ProtectREra (share via social media)

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NEXT STEPS

National

Steve Brobeck, the Executive Director of CFA first called real estate a cartel in 1991, and MassPIRG’s Executive Director Janet Domenitz was reelected President of CFA.  We’ve requested a meeting with @MassPIRG to background their team and get the Sleeping Giant of the Consumer Movement back on the Consumer Federation of America / @ConsumerFed’s radar screen if not the front page of the Boston Globe through their new consumer column, written by an investigative journalist with a law degree!

At Harvard

As an alum, have had divided feelings about blowing the whistle on Harvard’s involvement, but prepared a comprehensive critique of their homebuying class four years ago and more recently asked the state to take disciplinary action against Coldwell Banker for this blatant mispresentation:

In Boston

The National Association of Realtors is coming to Boston for their annual in November 2018, and http://RE2020.Loomio.org / #RE2020 hopes to organize quarterly events, including unconferences or hacks, before that date. As Bloomberg reported, Real Estate is Ripe for Disruption and Boston / Cambridge can become a lab for that challenge:

http://bit.ly/OpenREDisruptMA (share via social media)

http://bit.ly/RE2020Lab (share via social media)

Dream Scenario

This Fall marks the 25th Anniversary of Ralph Nader’s first speech on the real estate cartel, and consumers — primarily in Canada at this point — are using the hashtag #RECartel to express their anger at the industry. Can we use that anger (and maybe get Nader involved) to turbocharge new #CustomerTech tools to deliver BILLIONS in savings in real estate? That’s the goal of #RE2020, hence our desire to cohost a #Hack4REGood during @HUBweek.

This evening I can demo TransitionBank, an IntentCasting concept a four person team produced at Hacking for Good event at Harvard’s @InnovationLab ten days ago. What else should we talk about?

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VOTE

http://bit.ly/PopUpRE2020_2Q2017 (share via social media)

Posted in Blockchain, Buyer agent, Consumer protection, Defensive Homebuying, Disrupt Real Estate, Dual Agency Detective, HousingID, IntentCasting, Investigative Reporting, RECALL: Real Estate Consumer Alliance, Savings & Rebates, VRM | No Comments »

In #DysTrumpian era of “Consumer Protect Thyself,” powerful DIY tool for Homebuyers

IMG_1754

In #DysTrumpian era of “Consumer Protect Thyself,” will real estate innovators step into the gap to help consumers make informed decisions? This campaign was launched today, #FlagDay and the first day of #NAREE17, to give homebuyers a powerful DIY tool: a compelling Pledge Of Allegiance they expect from their buyer agents. It’s designed to prevent conflicts of interest which means zero tolerance for dual or designated agency.

Credit where credit is due: Maureen Glasheen, then attorney at the NY Dept of State, created the original Pledge of Allegiance approximately 25 years ago; and Doug Miller, founder of http://CAARE.org updated the text several years ago. Frances Flynn Thorsen created the video magic this morning!

Sharing links here so others use:

(1) Watch video http://bit.ly/GetREPledge (share via social media)

(2) Print form http://bit.ly/PledgeCAARE (share via social media)

Finally, the blog post below explains why the newly revised agency disclosure form in Massachusetts is already obsolete and points to the future of #RegTech & #RETech:

From #FakeBuyerAgents to Smart Disclosures & Information Fiduciaries

http://bit.ly/FakEBA2FutureRE (share via social media)

Posted in Buyer agent, Consumer protection, Defensive Homebuying, Designated Agency, DIY Homebuyers, Dual Agency Detective, Dump Dual Agency, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance | No Comments »
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