In a lawsuit filed May 9th, 2007, FNC has been sued for:
- False Advertising under the Lanham Act
- Intentional Misrepresentation (Fraud)
- Negligent Misrepresentation
- Conversion, Misappropriation, and Breach of Bailment
- Breach of Implied Contract
Click here for the source document: FNC Complaint
"The Plaintiffs bring this action as a class action on behalf of all appraisers, including both individuals and entities engaged in performing appraisals, who have used the AppraisalPort web service of FNC since its inception through at least April 2007, and who were damaged thereby."
The Plaintiffs are requesting that the Court award them damages and/or recoupment of profits in an amount greater than $5,000,000 to be determined at trial.
The complaint starts off with a brief history of how AppraisalPort functions, the AI Ready data standard, and how appraisers interface with the service and their clients.
It also describes the FNC Collateral Management System that "allows lending institutions to manage the process of ordering, obtaining, storing, reviewing, and analyzing information about the collateral securing real estate mortgages, i.e., primarily the information from property appraisals."
According to the complaint, "FNC has repeatedly assured and represented to appraisers who use its AppraisalPort service that FNC does not have access to the appraisal report data transmitted from the appraiser to a lending institution via the Appraisal Port service." Several references from interview, newsletters, and their own Web site were referenced to support that claim.
The complaint alleges that, "On or about April 2007, these representations . . .were removed from FNC's website, apparently because FNC obtained information the appraisers were planning a lawsuit based on these representations."
Click below to continue reading . . .
The complaint also claims that, "Contrary to the representations made by FNC to appraisers, FNC has and is continuing to copy, store, and use appraisal report electronic data transmitted via the Appraisal Report service. In fact, it has built a national database of information about properties using appraisers' information transmitted on AppraisalPort."
Where did they go wrong? According to the complaint: "On the FNC web site for the AppraisalPort service, FNC advertised and represented that FNC does not access or store the appraisal report electronic data transmitted by appraisers to lending institutions using the AppraisalPort service, that this data is "secure" and that this data is "unseen" and "untouchable" by FNC and third parties, and that this data is not used to build a database"
The complaint alleges: "Based on these representations, FNC charged appraisers up to $6 each time they transmitted data using its service. These statements and representations made by FNC are not true. In fact, FNC downloads this data into FNC's National Collateral Database and then markets access to this data to lending institutions and other third parties."
"Thus, not only does FNC collect fees from appraisers based on misrepresenting the service it is providing, it collects additional profits from others based on the very same data and the work of the appraisers it dupes into using its service."
Appraisal Scoop Related Blog Posts:
- Lawsuit claims AppraisalPort mining reports for database - Inman news 7/3/07
- FNC Says: Appraisal Report Data: Not Intellectual Property, Not Protected by Copyright
- Appraisers Upset at "Stripping" of Their Proprietary Data
- Kenneth R. Harney Article - Click here.
- FNC Newsletter - Collateral Vision
- a la mode Newsletter - AVM Companies now admit to using appraisals for their data
Source Document: http://appraisalnewsonline.typepad.com/FNCComplaint.pdf
Thanks to Bill Seward - Seward Appraisal Services for forwarding this document.