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Southland Title Fined $8.8 Million for Alleged Kickbacks

March 22, 2001|Jennifer Oldham

The state Department of Insurance issued an $8.8-million penalty against one of Southern California's largest title companies for allegedly providing illegal kickbacks to area real estate agents and mortgage and escrow companies.

The department filed a complaint against Burbank-based Southland Title Corp. and its subsidiaries, Southland Title Corp. of Orange County and Southland Title Corp. of San Diego, alleging the company violated a law that prohibits gifts in exchange for business brought to a firm.

The complaint alleges that Southland Title spent at least $1.7 million over three years on fishing trips to Mexico, trips to the Del Mar Racetrack and on concert tickets, among other items, for real estate agents and others in the industry.

Southland Title also spent money on gift certificates, gifts for baby and wedding showers, catering for Christmas parties, and photocopies, postage and office supplies for Realtors, the complaint alleges. Southland executives were not available for comment.

Kickbacks have been a long-standing complaint in the title industry. Although these perks don't immediately affect consumers, the department is concerned that they reduce competition in the industry and might cause real estate agents to recommend one title company over another to a consumer.

The department started investigating the firm in 1998 after receiving numerous complaints about the title company from consumers, said Deputy Commissioner Scott Edelen.

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