Attorney General Brian L. Schwalb announced today that Universal Title (Universal) will pay $500,000 following an investigation by the Office of the Attorney General (OAG) that revealed the company’s involvement in an illegal title insurance kickback scheme.
Scheme’s Details
The OAG investigation found that Universal offered real estate agents discounted ownership interests and profit-sharing in entities. This was done to incentivize the agents to refer business to Universal. The OAG determined such conduct was anticompetitive, created conflicts of interest, and limited District homebuyers’ options for title insurance and escrow services. The actions also harmed law-abiding competitors in the title insurance industry, which violated the District’s Consumer Protection Procedures Act (CPPA).
“My office is committed to ending illegal kickback schemes in the title insurance industry,” said Attorney General Schwalb. “Universal’s secretive conduct prevented District residents from making fully informed decisions about how to spend their hard-earned money when making one of the most significant investments they’ll ever make—buying a home. Universal’s business plan violated core free market principles – limiting customers’ choices and putting law-abiding competitors at a disadvantage.”
Past Enforcement
This settlement follows previous OAG enforcement actions against kickbacks for referrals in the title insurance industry, including an industry sweep that secured over $3.2 million from four other title insurance companies in August 2024.
Title insurance, often required by lenders, protects homebuyers and lenders from title defects, such as previous owners’ debts. Real estate agents commonly recommend title insurance firms to their clients. Federal and District laws, however, prohibit kickbacks and other forms of compensation for referring title insurance and escrow business.
These laws are intended to ensure that real estate agents act in their clients’ best interests, not their own, and prevent artificially inflated closing costs.
While federal law allows for certain affiliated business arrangements under specific conditions, District law is more stringent and does not offer such an exception.
OAG found that the financial incentives Universal provided to real estate agents by offering them discounted ownership interests in spin-off companies led the agents to aggressively steer their homebuying clients to the spin-offs for title insurance. These transactions increased Universal’s profits and padded the agents’ income while unfairly interfering with the homebuyers’ ability to shop for the best price and service. These transactions also interfered with free and fair competition in the local title insurance market: title companies that followed the law lost business to Universal and other entities that utilized the kickback scheme.
Settlement Terms
Under the settlement agreement:
- Universal will pay $500,000 to the District.
- The District will allocate a portion of the settlement funds for restitution for affected consumers. OAG will provide more information to homeowners in the coming months.
- Universal will cease the practice of offering real estate agents consideration for referrals of title insurance business and will either end its title insurance operations in the District or have the real estate agents divest their ownership in the spin-off companies.
This matter was handled by Assistant Attorney General Marcia Hollingsworth, Deputy Director of the Office of Consumer Protection Kevin Vermillion, and Director of the Office of Consumer Protection Adam Teitelbaum.
