Title company to pay $1 million penalty after Department of Insurance alleges employee broke law protecting real estate consumers
News: 2021 Press Release
LOS ANGELES — In the second recent case involving one of its employees, First American Title Company has agreed to pay a penalty of $1 million after a California Department of Insurance investigation alleged that one of its title marketing representatives violated state law protecting consumers from conflicts of interest that can inflate the cost of real estate transactions. First American agreed to pay $50,000 to settle similar allegations against another employee in January 2021.
The Department’s investigation concluded that Eugene “Gene” Bleecker, a former First American marketing representative in northern Los Angeles County, consistently violated anti-inducement laws by providing illegal benefits to real estate agents, including custom video marketing, a tour bus caravan to bring agents to view and promote listings, social media training, and sales coaching.
The investigation found that Bleecker managed an approximately 600-member strong real estate networking group called the Advisory Group Real Estate Network, with chapters in the Santa Clarita, Antelope, and San Fernando Valleys. He was the only title marketing representative in the group, and decided when and where to start new chapters, and who could join or remain in the group.
“By looking the other way while one of its employees marketed its products in violation of state laws, First American Title Company failed to protect real estate consumers from conflicts of interest that can inflate the cost of title insurance,” said Insurance Commissioner Ricardo Lara. “This $1 million penalty should serve as a warning to companies that they are accountable for their employees’ actions that harm consumers.”
First American encouraged Bleecker’s involvement with the Advisory Group despite internal guidelines for complying with anti-inducement laws, such as avoiding assisting others with marketing services or methods of growing their business. Interviews of Bleecker’s managers and review of internal communications showed that the company advocated a hands-off approach to supervising his activities because of the amount of business that Bleecker brought to the company.
The agreement with First American includes $185,000 for reimbursement of the Department’s investigative and legal costs. The Department’s action against Bleecker’s individual license to act as a title marketing representative remains pending.
In a separate case in January 2021, First American agreed to pay $50,000 to resolve allegations against a different employee who also violated anti-inducement laws.
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- Under California Insurance Code Section 12404, an unlawful inducement occurs when a realtor or lender receives, or is put in a position to receive, direct or indirect things of value in exchange for steering business to a title company. Such acts inflate title insurance premium rates for all consumers.
- Read the agreement with First American Title Company.
- Read the Department of Insurance accusation of alleged activities.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.