Can your Home Inspector sell off your personal information?

Can your Home Inspector sell your information off to another party for additional compensation?  This question has been recently debated heavily and you need to know the answers as your privacy is at stake!

[tab: Introduction]

Are you aware that your Home Inspector might be providing your personal and confidential information to some third party to market more products and services to you?  Obviously there is no reason for the Home Inspector to divulge your personal information unless the Home Inspector is also making additional money or other valued compensation by doing so.  Some of these schemes pay the Home Inspector directly by immediate referral fees or other products/services to them while other schemes pay the Home Inspector a large commission additionally when you buy those products or services.  Unfortunately many consumers are not aware of this or the details are not made clear to them by the Home Inspector.

This type of activity by Home Inspectors occurs very frequently even though there are laws/rules to prevent your private and confidential information from being just another revenue stream for these Home Inspectors.  In Texas licensed Home Inspectors have a very strict set of confidentiality laws/rules they must follow.  Even with these laws/rules it certainly does not stop some Home Inspectors on cashing in on your private information.  The laws/rules governing Home Inspectors in Texas can be found by clicking HERE.  The section of these that comes into play that is suppose to protect you is 535.220 Professional Conduct and Ethics.  Of interest in those sections are the following specifications.

(b) The relationship between an inspector and a client should at a minimum meet the following guidelines.
(1) In accepting employment as an inspector, the inspector should protect and promote the interest of his client to the best of his ability and knowledge, recognizing that the client has placed his trust and confidence in the inspector.
(3) The inspector should conduct his business in a manner that will assure his client of the inspector’s independence from outside influence and interests that might compromise his ability to render a fair and impartial opinion regarding any inspection performed.

(c) The relationship between an inspector and the public should at a minimum meet the following guidelines.
(3) The inspector accepts the duty of protecting the public against fraud, misrepresentation or unethical practices in the field of real estate inspections.

(e) An inspector shall comply with the following requirements.
(4) An inspector shall not receive a fee or other valuable consideration, directly or indirectly, for referring services that are not settlement services or other products to the inspector’s client without the client’s consent.
(7) Inspectors shall not disclose inspection results or client information without prior approval from the client. Inspectors, at their discretion, may disclose observed immediate safety hazards to occupants exposed to such hazards when feasible.

 

These sections noted above are the sections that deal with helping to prevent this practice of Home Inspectors basically selling off your private and confidential information to make even more money from your home inspection.  Now don’t get me wrong as a business is in existence to make a profit and there is nothing wrong with that fundamental concept.  The problem that comes into play is how they make that profit and if you the consumer are aware of the loss of your privacy and confidentiality when they sell off your information?

So how does this all happen and what does it mean to you?  Read on to the next tab to learn how this activity works.

[tab: How You Lose]

“By signing this contract you authorize the Inspector to provide your personal and contact information to a Third Party (TP) that can offer you additional valuable services and products for your use.”

Have you seen that phrase before, or something similar to it, either in your home inspection agreement or an addendum to it?  This is essentially a blanket approval that you are signing for the Home Inspector to sell your personal and confidential information to anyone they so desire.  Again there is no reason for a Home Inspector to require your approval to provide your personal and confidential information to anyone else UNLESS THEY ARE MAKING MONEY OFF OF YOU BY SELLING THIS INFORMATION! Stop and think about that for a moment.  If whatever extra product or service they are trying to push on you is so “valuable” then why not just provide you the basic information for how to obtain it and allow you to contact that “Third Party” yourself?  If you have an interest in it, and it is that great of a product or service, then you can call the “Third Party” yourself.  If the “Third Party” product or service does not interest you then you can decide not to contact them and thus not provide your private information to them.

The major problem for you is that once you provide your approval to basically allow the Home Inspector to sell your information to that “Third Party” you’ve lost total control over the incessant telemarketing telephone calls, the junk mail solicitations, the email SPAM, etc.  After all statements like the one above are blanket approvals and you certainly have no idea how many different “Third Party’s” your information is going to be given to, resold to, or used by.  One of the people your information might be given to is a company that does nothing more than market products and services on a contract basis for many other companies.  The “Do Not Call” registry, the SPAM email laws, and all of the other supposed legislation that is there to help protect you is potentially out the window since you just provided your written approval with one of these blanket statements.

So what about the laws/rules that govern Home Inspectors that I cited in the first tab?  Aren’t they there to help protect you as well?  If you read the following citation again then the answer is “NO” if you provide the Home Inspector the approval.

(e) An inspector shall comply with the following requirements.
(4) An inspector shall not receive a fee or other valuable consideration, directly or indirectly, for referring services that are not settlement services or other products to the inspector’s client without the client’s consent.

 

Our rules/laws are also very unclear in many aspects, and one of those aspects happens to be the use of a blanket approval statement allowing the Home Inspector to sell your information to anyone they want for any amount they want to collect or can collect.  The rules/laws will never require the Home Inspector to disclose the amount or type of compensation they are receiving as that is probably considered an anti-business practice trying to control what a business can earn.  Governments typically won’t go there as they are there to protect the business as well as the consumer.  But what about the use of blanket approval statements instead of specific information about where your information is being sold off to?  I asked the Texas Real Estate Commission (TREC) in a Request For Interpretation (RFI) two questions regarding the use of blanket approvals to disseminate clients’ confidential information and the response was very interesting.  These are my questions and TREC’s answer.

My Questions

Can a blanket approval for dissemination be extended beyond the immediate participants in the real estate transaction or must the client provide specific approval to disseminate beyond the immediate participants of the real estate transaction?  For the purposes of identifying the “immediate participants” these are considered to be those specified as “settlement service providers” and listed in Section 535.220 (e) (2) of the rules.

If a blanket approval does not cover dissemination beyond the “settlement service providers” then must the client be advised of every specific person or entity that the “client information” will be provided to, or can the client provide a blanket approval to any other outside of the settlement service providers?

TREC’s Response

Finally, the Rule does not specify whether a blanket approval would be sufficient. Therefore, the Commission may interpret the Rule to require approval for any and all information disclosed and for each person/entity to which the information is disclosed.

First off the Home Inspector must, according to the rule above, advise you that they are receiving a fee or other valuable consideration for handing out your private and confidential information.  As I read TREC’s response the Home Inspector must also notify you what all of your private and confidential information will be provided and identify every person and/or entity that your private and confidential information is going to be provided to.  In other words the Home Inspector can not use a “blanket release” form for your approval to sell your information whether it is a settlement service provider (see above) or some “Third Party”.  They must spell out the name of the person or entity (business) they are selling your information to.

So how do you protect yourself in this day and age where everyone seems to have your information?  Read on to the next section (tab) for some very good tips.

[tab: How To Protect Yourself]

The only way to protect yourself is to know everything, full disclosure, from the Home Inspector so you can make the decision to either release your information or refuse to release it.  The following steps can help you protect yourself.

  1. Read any contract, addendum, or separate release form very closely.  If it contains some type of blanket release statement, and does not specifically spell out who your information is being provided to, then DON’T SIGN IT!  According to TREC the use of a blanket approval is not permitted.  Regardless of TREC’s stance on blanket approvals it is in my opinion a less than open and full disclosure that needs no rule or law to tell me it is not in the best interest of my client.
  2. Even if the name of the person or company is spelled out you need to be very careful and demand to know the following.
    1. What is this company’s line of business?  Are they the ones that will be providing the actual service and/or product or are they in fact some type of middleman, marketing company, etc.  If the company is nothing more than a middleman or marketer how do you know your information isn’t being resold over and over?
    2. Will this company resell or re-use your information to other companies or even other segments of this company?  You need to get a full copy of the company’s privacy policy that spells out how they will store and use your private and confidential information.  Do you really want a company selling or redistributing your personal and confidential information over and over again?  It only takes them selling it to one other company and the “reselling” can snowball and never stop!
    3. How can you “Opt Out” and stop having this company calling you, sending you emails, or communicating with you in any other way?  Make sure that the “Opt Out” method is something you are agreeable with.  I’ve seen many opt outs where you have to send them an actual letter via postal mail.  How many times have you been told when sending a paper letter “GeeWhiz we never received it”?
    4. If this company is reselling your information who are they selling it to and how do you opt out of any other company they are reselling it to?
  3. Specifically what information is the Home Inspector selling to the company they are selling the information to?  You need to know that other protections for you like the Do Not Call (DNC) telephone registry are out the window if they give your telephone number out.  The DNC was put in place to stop cold call telemarketers and not someone you approved to call you.  If you provided a throw away email address you can end SPAM email, but if you gave a permanent email you could be in for a lot of junk email from all over the place.  How about the Home Inspector providing a lot of details for your actual inspection, what equipment and appliances you have in the house, and who knows even a copy of the actual inspection report?  Are you aware that just giving them the house address it is not hard to find out what you might actually have paid for the home?  That can give the telemarketer and idea of your income bracket as well.  The possibilities are endless on the ease of reconstructing your life by what information the Home Inspector is selling them.
  4. How much is the Home Inspector getting paid for this lead or what other “valuable consideration” are they being given for selling off your private and confidential information?  The Home Inspector is already required to tell you they are being paid or receive a valuable consideration for your information so why shouldn’t you know what that is?  Go back to the first tab and read the rule (b)(1) & (3) as well as (c)(3).  The buying and selling of consumer information is a HUGE business all in itself.  Some of these schemes can net the Home Inspector hundreds of dollars just for one lead if you buy the product or service.  As for other valuable consideration how do you know that the lead is for some type of high dollar product or service that the Home Inspector is purposely writing up as needing work or replacement in the report just so they can turn in a paying lead and make their money?  If that was the case how is the Home Inspector being “independent” and “impartial” in his findings?  If the Home Inspector stands to make big money off of your private and confidential information then why shouldn’t you get some of that if you agree to selling your information?  After all isn’t your information valuable to you and haven’t you already paid the Home Inspector enough?

You’re already paying the Home Inspector to perform a service for you so why should you pay even more by allowing them to sell off your private and confidential information?  Nobody is saying you should not take advantage of a product or service that you truly feel is worthwhile to you.  What you should do though is be very careful and know the details of these supposedly great offers to you.  Whenever you hear “Get a free this or that just by allowing me to provide your information to…..” it should be a red flag for you to look harder.  Nothing is free and everything has a cost to it.

Be safe and good luck on your home purchase!

[tab: Links and References]

PS Inspection & Property Services LLC is a full service home inspection and light commercial inspection company servicing the entire Dallas/Fort Worth metroplex.  We strive to for the satisfaction of our customers in everything we do.  Our services offerings include:

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If you have an inspection need we can customize an inspection for it.  Please visit our main site at PS Inspection & Property Service LLC.

 

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