There is a growing concern among FYBA members about “phantom listings” on MLS sites. A phantom listing purports to offer a vessel of certain specifications for sale at a specific price. However, the broker posting the listing does not have actual authority to market or sell the vessel. Instead, the posting broker intends for buyers interested in the listed vessel to contact his or her brokerage, at which point the broker tells the interested buyer that the particular vessel is no longer for sale (i.e. has been sold, taken off the market, etc.), and then offers the buyer another genuine listing. From a legal perspective, this scheme can be referred to as a “bait-and-switch” trade practice.
Phantom listings are damaging to yacht brokers, in that it tarnishes the integrity of the profession, as well as to individual brokers who lose out on commissions they may otherwise receive when a customer is “stolen” by the purveyor of a phantom listing. So, what, if any, remedies are available to those who are harmed by phantom listings?
Unfortunately, there is currently no law in Florida that specifically prohibits this type of behavior. There are federal laws that may apply, but only in very unique situations. For now, the best remedy for someone who has been harmed by a phantom listing would be to sue under the Florida statute that prohibits unfair and deceptive trade practices, FDUTPA.
Clearly, the posting of phantom listings qualifies as a deceptive trade practice. Under the statute, anyone aggrieved by a phantom listing can seek an injunction – which is a court order that prevents the broker from posting any more phantom listings. Possible aggrieved parties include prospective buyers and yacht brokers.
The FDUTPA also allows a party to sue for monetary damages, but only when that party can prove it suffered an actual loss. This type of claim is limited to a situation where a broker has contact with a buyer concerning a specific vessel. The buyer then sees an online phantom listing for the same vessel listed with another brokerage. Based on the phantom listing, the buyer goes to the second brokerage only to be told that the listed boat is no longer for sale.
Instead, the buyer is shown other boats and ends up buying from the second brokerage the same model boat he was planning to buy through the first brokerage. In such a situation, the first broker suffers an actual loss in the amount of the commission he would have earned if the buyer had not been lured by the phantom listing and had bought the boat from the first broker. Unfortunately, these situations are unusual and actual damages are difficult to prove. The more likely scenario is one in which a broker with a legitimate yacht listing sees a phantom listing, which has been posted by another broker. In that case, the broker with the legitimate listing can file a lawsuit seeking injunctive relief from a Florida court to force the second broker to take down the phantom listing and to refrain from posting such false listings in the future.
The bad news is that the first broker would not be entitled to any monetary damages in that case. The good news is that those brokers who do bring a lawsuit for injunctive relief will likely be able to get their attorneys’ fees and other costs paid by the losing party.
Brokers who do not want to be involved in a lawsuit can alert the Office of the State Attorney about FDUTPA violations. The State Attorney may then pursue an injunction or bring a claim on behalf of a person who suffered an actual loss.
All in all, phantom listings are harmful to the yacht brokerage industry and should be stopped. Hopefully, if there is a concerted effort to identify and punish the perpetrators of these deceptive trade practices, we can look forward to a time when phantom listings are a thing of the past.
FDUTPA stands for “Florida Deceptive and Unfair Trade Practices Act” and can be found in Fla. Stat. § 501.201 et. seq.