The Consumer Financial Protection Bureau (CFPB) has ordered Meridian Title Corporation to cease a referral practice in violation of the Real Estate Settlement Procedures Act (RESPA), and pay up to $1.25 million in redress to consumers, the agency recently announced.
According to a release on the announcement, Meridian, based in South Bend, Ind., directed consumers to “a title insurer owned in part by several of its executives without making disclosures about the businesses’ affiliation.” The insurer, Arsenal Insurance Corporation, is partly owned by three Meridian executives. The CFPB discovered Meridian failed to disclose the businesses’ relationship to 7,000-plus consumers, and pocketed “extra money” beyond its normal commission for referrals.
“Meridian Title illegally steered consumers into purchasing a product from an affiliated company to add to its bottom line,” said Richard Cordray, director of the CFPB. “We’re ordering it to halt this practice and pay up to $1.25 million to consumers who were harmed.”
The CFPB is also ordering Meridian to disclose the nature of referrals going forward.
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