If you've had a seller complain about unsolicited calls and heaps of mail from moving companies and other service providers following giving you their listing, you may have a problem. The seller blames you for sharing their private data when the fact is, someone from your MLS has possibly sold exclusive MLS data, including your seller's, to a third party.

According to MLSs across the country, the problem of unauthorized use of MLS data is getting worse. Protected MLS information is being sold like phone lists, including to member brokers and agents who wish to use the information to gain competitive advantages over other members.

Sound far-fetched? A new court case and human nature say it isn't.

If you wanted to open a real estate office in a new location, would you pay to find out who the top listers or producers in that area are? Would you be willing to give your passcode and ID to a statistics company to mine MLS data to give you those top agent names and performance statistics? Would you know or care if that company sold the data to another third party - as long as you got what you wanted?

Those are among the questions that have caused MLSs to impose regulations designed to prevent members from sharing their passcodes or I.D.s with anyone else. Noncompliance could put members at risk of sanctions such as fines, suspension of MLS service, or expulsion from the MLS.

But the temptation is proving too strong for some brokers who have found an under-the-counter recruiting tool in a company called Info Marketing Systems, Inc. (IMS).

Beth Murphy, president and CEO of RMLS™, an 8,000-member MLS serving the Portland metro area to Southwest Washington says IMS is accessing MLS data, repackaging unauthorized MLS data (including agent statistics) into original reports, and selling the reports to brokers.

RMLS has brought a court action against IMS which has resulted in a permanent injunction against the company directing it to stop the sale of any current products that utilize RMLS™ data, and prohibits any further access to the RMLS™ database without prior written permission.

"In short, they were selling their products to our members," explains Murphy. "They required that the agent give them their private identification and passcode, and then the company would dial in to the MLS as though they were that agent.

"They would take the information, download it, sort it, and run some enhanced statistical calculations that provided competitive information in the marketplace. It wasn't a matter of just downloading the reports, it was using the data to generate different reports that are not available from the MLS."

“This injunction sends a strong and clear message that we will not tolerate the unlawful use of our data,” says Murphy. “The information in our database is private and we will do whatever is necessary to protect our members from those who attempt to unlawfully profit from its use.”

Data downloads are posing new challenges to MLS information integrity as MLS organizations wonder who else is profiting from the data.

Arizona Regional MLS executive vice president Bob Rucker, says his organization is also familiar with IMS. "In the past our attorneys have had contact with IMS, and in light of the court case in Portland, we may have to take another look that what we were told was true. We were told by IMS that they weren't taking the data."

That means that the MLS's guard will have to go back up.

"We have 17,000 agents, so we don't know who talks to whom," worries Rucker. "The way the MLSs are today where you have the ability to download information, it is hard to tell who has access to the data. Let's say they find an authorized subscriber and tells them we'll do certain things for you. Even though that isn't right, the agent might give their codes.

"In the real world, once that happens, they can keep it refreshed and they can contact other people."

This could pose a threat to the MLS system. "It makes the people who are paying for the data wonder why they are paying," says Rucker. "These guys come out of the woodwork and you don't know about it until someone complains - there is no way to watch 17,000 agents."

All kinds of companies sell lists, but they have to get the data from someone.

"It's annoying," says Rucker. "I get angry Realtors and homeowners who want to know how they got on this or that list, but you can't prove the source or say that perhaps it was an agent. They want us to fix the problem, and we can't because we don't know who is providing the information. If we did, we would take appropriate action."

Murphy vows that she will work hard to find out which brokers are selling MLS information. So far, the MLS has issued no sanctions against brokers, but Murphy says the MLS will if evidence of misconduct is found.

"We have to protect the intellectual property of the MLS," she says.

Editor's note: IMS could not be reached for comment.

Published: April 24, 2002

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