Modus, the closing companies software program firm, allegedly violated state statutes over co-branding, social media promoting and mechanisms it used to lure shoppers.
Modus, a title and escrow service software program firm owned by Compass, is about to have its license revoked by state of Washington efficient April 1 over a number of violations, together with social media and co-branding violations, in addition to the alleged merchandise it used to lure shoppers away from different corporations and the nontitle companies it allegedly supplied free of charge or under market worth.
The transfer comes on the heels of complaints acquired by the state from two rival title corporations.
“The Insurance coverage Commissioner opened an investigation upon receipt of complaints from two Washington title firms,” the doc reads. “Each firms allege that the licensee is offering rebates and inducements by way of a know-how platform working beneath the tradenames ‘Modus Applied sciences’ and ‘Modus.’”
A part of the criticism facilities round “Staging Enhance,” a platform providing in partnership with ZingFix, a third-party vendor that secures cleansing, landscaping, staging and itemizing preparation renovation with a deferred cost. The criticism states Modus used that partnership to lure prospects away from different title firms.
Washington State regulation prohibits a title insurer or insurance coverage agent from straight or not directly “giving any charge, kickback, or different issues of worth to any particular person as an inducement, cost, or reward for putting enterprise, referring enterprise, or inflicting title insurance coverage enterprise to be given to both the title insurer, or title insurance coverage agent, or each,” in keeping with the state statute.
The criticism additionally alleged that, in six separate situations, Modus gave or supplied to provide non title-related companies with out charging or receiving a charge equal in worth to the companies supplied — which is set by market value — which violates state regulation.
The opposite accusations must do with a social media promoting violation and co-branding violations.
Compass acquired Modus, a Seattle-based title and escrow software program agency, in October 2020 for practically $50 million, as a part of its quest to construct a platform for its actual property brokers. The corporate moved additional into title and escrow companies in latest weeks with the acquisition of KVS Title.
The introduced suspension of Modus’ license in Washington might probably throw a wrench within the growth of that platform for brokers in Washington, the place Compass has a big presence on the again of its 2018 acquisition of Avenue Properties.
A spokesperson for Modus confirmed the corporate will attraction the choice.
“Modus is interesting the choice of the Workplace of the Insurance coverage Commissioner and we look ahead to working with them to rapidly make clear any misconceptions round our enterprise practices,” the spokesperson stated in an announcement. “Modus will stay operational all through the attraction course of whereas this matter is being resolved.”