On October 24, the District of Columbia Office of the Attorney General (D.C. AG) announced a $500,000 settlement with a title insurance company accused of an illegal kickback scheme. The D.C. AG alleged the company offered discounted ownership interests and lucrative profit-sharing arrangements to real estate agents in entities created to make business referrals to the title company. This alleged conduct violated D.C.’s Consumer Protection Procedures Act. The company denied these allegations but agreed to the settlement, which mandates a $500,000 payment to the District.

The company agreed to end the practice of giving real estate agents consideration for the referral of title insurance business and to either cease its title insurance operations in D.C. or divest real estate agents from their ownership interests in the spin-off entities. The company is also prohibited from forming or maintaining ownership interests in any entity offering title insurance or settlement services if real estate agents have an ownership interest, and any existing entities may not apply or reapply for licensure so long as they are owned in part by real estate agents.

This is not the first time the D.C. AG had taken action to curtail illegal kickback schemes in the D.C. real estate market. As previously covered by InfoBytes, the D.C. AG previously secured settlements totaling $3.2 million against four other title companies for similar kickback schemes.