ST. LOUIS — Missouri Attorney General Andrew Bailey filed a petition for a permanent injunction against MV Realty alleging deceptive practices.
In the lawsuit, the state alleges MV Realty of Missouri, MV Realty PBC, MV Realty Holdings, MV Brokerage of Missouri, Amanda Zachman, Antony Mitchell, Steven Scott and David Manchester violated the Missouri Merchandising Practices Act.
MV Realty was established in Missouri in December 2021 and is accused of engaging in misleading advertising and high-pressure tactics.
"As Attorney General, I will enforce the laws as written and defend innocent Missourians from being ripped off," Bailey said in a statement provided to The St. Louis Record. "I’m proud of the work done by our Consumer Protection Unit to obtain justice for victims in this case. The Attorney General’s Office will continue to do everything in our power to protect Missourians from deceptive business practices."
The company promoted its Homeowner Benefit Program (HBP) through phone and internet ads, promising small grants in exchange for individuals using their real estate listing services.
However, the program allegedly trapped consumers into long-lasting and high-penalty contracts, including placing liens on their homes.
MV Realty's tactics drew attention from the Federal Communications Commission (FCC) for violations related to robocalls and the Do Not Call Registry.
The FCC investigation revealed that MV Realty made approximately 12 million calls to numbers on the National Do Not Call Registry.
In Missouri, the company reportedly made more than 42,000 solicitations to numbers on the Missouri Do Not Call List.
The defendants used neighborhood spoofing, displaying Missouri area codes to deceive recipients into thinking calls were local, according to the suit.
The Homeowner Benefit Agreement, a 40-year binding contract, required consumers to pay 3–6% commissions on their home's sale price, even for non-sale transfers like inheritance, according to the suit.
MV Realty allegedly employed notaries to pressure consumers into signing contracts without providing advance copies or explaining crucial terms, like the lengthy obligation and liens on properties.
Consumers, often in financial need, received an average of $578.61 but owed an average of $6,673.20 upon selling or transferring their homes.
After signing, MV Realty placed a memorandum on property titles, acting as a lien, hindering owners' ability to sell or refinance. The contract explicitly granted MV Realty a lien and security interest in the property.
Despite promises to facilitate refinancing, the company's actions suggested otherwise, according to the suit.
Since 2021, at least 380 consumers were reportedly affected by these practices.
The lawsuit seeks restitution for harmed individuals and injunctive relief to release those bound by contracts.
It also aims to halt MV Realty's fraudulent conduct.
The full extent of affected consumers may become clearer as the litigation progresses.
The attorney general is seeking damages for Missourians, including a declaration that the defendants' contracts were misrepresented and unfair and requiring the defendants to pay restitution to consumers. He also wants the defendants to pay a $5,000 penalty for each violation of the Do-Not-Call-Law, which is believed to be at least 42,452 violations, for a total of at least $212,260,000.