A class action lawsuit was just filed against Old Republic International, Old Republic Home Protection (ORHP) and Old Republic National Title Insurance Company in federal court in California. The lawsuit alleges that Old Republic and some of its subsidiaries “violated federal and state law by paying commissions and kickbacks to real estate agents in exchange for the agents’ referral” of Old Republic settlement service business. It is also alleged that Old Republic “actively concealed the kickbacks from consumers and federal and state regulators.”
The lawsuit is called Campion v. Old Republic International Corporation and was filed on January 27, 2012 in the United States District Court, Northern District of California, Oakland Division. Click here for a copy of the complaint.
According to the complaint, ORHP made more than 190,000 illegal payments between 2007 and 2009. It is alleged that these payments were made to more than 28,000 offices, agents, brokers, escrow offices, and lawyers. The complaint also alleges that the “payments were not in exchange for settlement services actually provided and were not nominal payments. In the case of kickbacks in exchange for the referral of home protection contracts, for example, the payments averaged approximately one-fifth the premium of such policies.”
The complaint also specifically targets “Marketing Agreements” or “Administrative Services Agreements” between ORHP and real estate brokers or agents. Under these Agreements, ORHP allegedly made payments to brokers or agents when the consumer purchased a home warranty contract. The lawsuit notes that, according to HUD, characterizing “such arrangements as ‘marketing’ or ‘administrative’ agreements does not render the underlying conduct legal” and that the agreements are “only a means to facilitate payments for referrals by persons in a position to refer settlement service business, in violation of RESPA.”
The lawsuit alleges that ORHP and other Old Republic subsidiaries violated RESPA, the California Insurance Code, and California’s unfair competition law by their kickback payments to real estate brokers or agents. The Complaint seeks restitution “of all sums unlawfully collected” from consumers, as well as treble damages and attorneys’ fees.
Did you receive compensation from ORHP or another Old Republic subsidiary? Are you a real estate broker or agent who was paid a fee by ORHP when a consumer purchased a home warranty contract? Are you a party to a Marketing Agreement or Administrative Services Agreement with ORHP?
If so, consider your potential liability. Will the brokers or agents who received compensation be the next targets of the class action lawyers? Will the CFPB and RESPA investigators step in?
Please share your stories of working with ORHP with RE-Insider. Have you experienced these “kickbacks?” We will respect your anonymity and post no names.
Stay tuned as we continue to report on this developing story.