Posted by ToniK on 8/11/07 4:23pm
Msg #205081

Stewart Title Company actions appalls Insurance Commissioner

Insurance Commissioner Mike Kreidler says he's "appalled" at the activities of Stewart Title Guaranty Co., claiming the insurer was "lavishing illegal gifts and incentives on real estate agents, brokers and others to influence business referrals."

Kreidler's office ordered Stewart Title to "immediately cease and desist" the gift giving, which he said violated Washington state's $25 limit on gifts.

The state reviewed Stewart Title of Snohomish County Inc.'s financial documents from December 2006 through March and found more than 100 violations of the $25 maximum, such as "desk fees," advertising, golf tournament sponsorships and other gifts.

"I'm appalled that this company clearly has paid no attention to our message that this spending violates the law and won't be tolerated," Kreidler said in a statement.

He added his office is investigating five other companies, and penalties against Stewart and the other companies will be announced when the investigation is complete.

http://seattle.bizjournals.com/seattle/stories/2007/08/06/daily4.html?t=printable

Reply by Charles_Ca on 8/11/07 5:49pm
Msg #205093

This is a practice that has been going on for decades. I agree that there have been occasional abuses but generally the gifts are comprised of access to their databases and notepads or pens. Frankly I have never asked and have never been offered more. I believe that it is very hard to legislate business practices. When I was a Senior Project Engineer we were severely handicapped by the federal government while doing business in Saudi Arabia. In the Middle East it is common practice to offer inducements (bakshish) to do business in the area. The federal Government sued my company and imposed sanctions to prevent the practice and the company has not been able to effectively do business in Saudi Arabia since. I agree that there are moral limitations that need to be observed but in the case of the Title Companies and the real estate agents I don't see the need for it. Every residential transaction in California has disclaimers to the effect that the buyer can have services rendered by their preferred companies but most buyers ask agents' advice when it comes to many of the services since most buyers do not have any objective criteria for deciding which service company to use. For the Insurance Commissioner to be "appalled" it must be an election year and he has no traction!

Reply by ToniK on 8/11/07 6:15pm
Msg #205095

I was just talking to my husband about how its normal business practice in other countries and Federal regulations hinders American businesses in most cases.

Reply by Dennis_IN on 8/12/07 11:24am
Msg #205159

I was discussing the RESPA guidelines concerning "buying" business and how they try to create a level playing field with my father the other day and how in his "financial industry" job gives trips, gifts and other incentives to "thank" him for his business. He saw nothing wrong with this practice but did concede the concept of a level playing field was ethically correct. However; he has yet to turn down a trip or prize from the companies who's products he sells.