Zillow has been accused of violaing the RICO Act. What is the RICO Act and what are the allegations against Zillow?

Here’s a clear, up-to-date explanation of what the RICO Act is and what Zillow has been accused of regarding RICO.

1. What Is the RICO Act?

RICO stands for the Racketeer Influenced and Corrupt Organizations Act (1970).It was created to fight organized crime, but it’s often used today in civil lawsuits involving allegations of:

To violate RICO, a plaintiff must show:

1. A pattern of at least two qualifying illegal acts (“predicate acts”)

2. Conduct of

3. An enterprise (individuals or companies working together)

4. Through racketeering activity

5. That caused financial harm

Common RICO predicate acts:

• Fraud (wire fraud, mail fraud)

• Money laundering

• Bribery

• Extortion

• Kickback schemes

A civil RICO lawsuit allows triple damages (“treble damages”), which makes it attractive for plaintiffs.

2. What Are the Allegations Against Zillow?

Several recent lawsuits have accused Zillow of activities that could constitute RICO violations. The central claims revolve around:

A. Steering Based on Financial Kickbacks

Plaintiffs allege that Zillow engaged in a “pay-to-play” steering scheme involving Zillow Home Loans (ZHL) and participating real estate agents.

Allegations include:

• Zillow allegedly pressured or incentivized agents in its Premier Agent program to steer buyers toward Zillow Home Loans.

• Zillow’s platform allegedly favored agents who used or promoted ZHL.

• This is alleged to constitute illegal kickbacks, a form of racketeering activity under RICO (specifically wire fraud and honest services fraud).

B. Deceptive Lead Routing

Some lawsuits claim Zillow misrepresented:

• How buyer leads are assigned

• How “Premier Agent” rankings are determined

• Whether referrals were based on consumer choice or paid financial arrangements

If true, courts may view this as fraudulent misrepresentation, another potential RICO predicate.

C. RESPA-Related Conduct Used as RICO Predicate

These cases often tie together:

• RESPA violations (illegal mortgage kickbacks/referral fees)

• Wire fraud (if electronic communications helped facilitate the scheme)

RESPA violations alone don’t trigger RICO, but RESPA + fraud = potential RICO predicate.

3. What Plaintiffs Claim the Result Was

According to the RICO lawsuits:

Consumers:

• Were steered to mortgage products they didn’t choose

• Paid higher fees or received worse loan terms

• Believed they were seeing unbiased agent recommendations when they were not

Competing Lenders & Agents:

• Lost business because Zillow allegedly favored those paying into the system

• Could not compete fairly with Zillow Home Loans or Premier Agents

4. Zillow’s Response

Zillow has publicly denied wrongdoing, typically arguing that:

• Zillow Home Loans and Premier Agent are separate business units

• There is no steering or pay-for-placement

• Lead routing is transparent and does not violate RESPA

• The lawsuits misunderstand how Zillow’s advertising system works

At this stage, no court has found Zillow guilty of RICO, but several cases have advanced far enough to survive early motions, meaning courts found the allegations plausible enough to continue.

5. Why RICO Matters Here

Plaintiffs use RICO because:

• It allows triple damages

• It turns a business-practices lawsuit into a claim of systemic fraud

• It raises the pressure and potential liability significantly for Zillow