First American Title Co. will pay a $ 1 million fine for improper benefits granted to California real estate agents.
The company, one of the “Big Four” title insurers, agreed to pay a $ 1.185 million fine after California regulators alleged a marketing rep gave agents illegal perks such as video marketing and drone recording of listings posted on social -Media sites offered and bus caravans to promote listings.
The company also agreed to pay $ 185,000 to cover the department’s legal and investigative costs.
The marketing rep was identified as Eugene Bleecker, now a former First American employee, who provided the aforementioned benefits to his Los Angeles-based group Real estate network consulting group. The majority of the group’s 600 members were real estate agents belonging to chapters in the Santa Clarita and San Fernando valleys, officials said.
California prohibits title agents from giving real estate agents perks as a business incentive.
How technology can improve the title experience without removing the human element
HousingWire Editor-in-Chief Sarah Wheeler speaks with Grant Brittain, SVP, Title Sales at Radian, about tackling title challenges through automation.
Presented by: Radian
In a statement sent to HousingWire, First American spokesman Marcus Ginnaty said the company was investigating the California Department of Insurance (CDI).
“We are pleased to clarify this matter with the California Department of Insurance and remain committed to compliance with the Department of Insurance,” said Ginnaty.
In its application, the CDI stated that Bleeckers Advisory Group has been offering services since 2013. Since then, the Advisory Group Network chapters have met once or twice a month, and depending on the chapter, members paid $ 6-10 to attend each meeting. For $ 200, members could attend all meetings for each chapter.
As Bleecker noted in his interviews, there are “significant benefits” to real estate agents joining the advisory group, including hearing bids before appearing on multiple listing services, promotional support and participation in touring coach caravans.
In an email to Chapter members dated October 8, 2016, Bleecker mentioned parts of the agenda for the upcoming meeting, including “Share With” [chapter members] Pocket offers before they come to the marketplace ”and“ To have your offers placed on the next bus tour ”. Members also posted generously on the group’s Facebook page, praising the “inside information” and “early tips” they received.
“First American encouraged Bleecker’s involvement in the advisory group despite internal guidelines on compliance with anti-incentive laws, such as:
California Insurance Commissioner Ricardo Lara said First American “looked the other way” while Bleecker marketed products in violation of state laws.
“The First American Title Company has failed to protect property consumers from conflicts of interest that can drive up property insurance costs,” Lara said. “This $ 1 million penalty was intended as a warning to companies that they are responsible for their employees’ actions that harm consumers.”
First American posted total revenues of $ 2.3 billion in the second quarter, up 41% year over year and from $ 2 billion in the first quarter of 2021.
In June, First American agreed to an injunction and paid a $ 487,616 fine under the Securities and Exchange Commission announced a cybersecurity breach that exposed customers’ social security numbers and sensitive financial information. The SEC said First American “failed to act” following the breach, finding that First American officers were unaware of the vulnerability but did not address it in accordance with company guidelines.
Comments are closed.