D.C. Attorney General Cracks Down on Title Insurance Kickbacks
D.C. Attorney General Brian L. Schwalb announced a $500,000 settlement with Universal Title after an investigation by the Office of the Attorney General (OAG) found the company engaged in an illegal kickback scheme.
The investigation revealed that Universal offered real estate agents preferential ownership stakes and profit-sharing in related entities. This aimed to incentivize the agents to refer clients to Universal, violating the District’s Consumer Protection Procedures Act (CPPA).
“My office is committed to stopping illegal kickback schemes within the title insurance industry,” said Attorney General Schwalb. “Universal’s actions hindered District residents from making informed choices about their finances when making a major investment—buying a home. Their business model breached fair market principles, limiting customer choices and disadvantaging competitors.”
This settlement builds on previous OAG enforcement actions targeting kickbacks in the title insurance sector. In August 2024, a similar industry sweep secured over $3.2 million from four other title insurance companies.
Title insurance, usually needed for home loans, shields both lenders and buyers from title defects such as prior owner debts. Real estate agents often recommend companies to their clients.
Both federal and District laws forbid kickbacks and other compensation for title insurance and escrow referrals. These laws ensure real estate agents act in their clients’ best interests and prevent anticompetitive practices from inflating closing costs.
While federal law allows for certain affiliated business arrangements meeting specific criteria, District law is more stringent and lacks such exceptions.
The OAG’s investigation showed that Universal’s financial incentives, like providing discounted ownership in spin-off companies, prompted agents to direct their homebuying clients to these entities for title insurance. These moves boosted Universal’s profits and agent earnings while restricting homebuyers’ ability to seek the best deal and service.
These transactions also hampered free and fair competition in the local title insurance market. Compliant title companies lost business to Universal and others using the kickback scheme.
Terms of the Agreement:
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Universal will pay $500,000 to the District.
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A portion of the settlement will be used for consumer restitution. OAG will provide further information to homeowners in the coming months.
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Universal will end the practice of providing consideration to real estate agents for referrals.
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Universal will either cease its title insurance operations in the District or remove real estate agents from 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.
How to Report Unfair Business Practices
OAG protects D.C. residents from fraud and deceptive business practices by investigating and mediating consumer complaints, educating residents about their rights, and taking legal action against businesses that break the law.
Since January 2023, OAG has secured nearly $50 million through enforcement actions and settlements for D.C. consumers.
To report scams, fraud, or unfair business practices, contact OAG’s Office of Consumer Protection:
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Submit a complaint online at: https://oag.dc.gov/consumer-protection/submit-consumer-complaint
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Call the consumer protection hotline at (202) 442-9828
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Send a complaint via email to [email protected]
