[co-author: Stephanie Kozol]

On January 24, Attorney General Ken Paxton announced an investigation of California-based title security company Home Title Lock for potential violations of the Texas Deceptive Trade Practices Act. In its civil investigative demand (CID), the AG alleged the company may have misled consumers by making deceptive statements regarding its “home title monitoring and/or home title resolution services.”

Home Title Lock is a subscription service that purports to protect homeowners from title theft. In a title theft scheme, an unauthorized individual fraudulently transfers title to property to himself or an accomplice. The perpetrator then resells the property or borrows against its value, pocketing the equity in the victim’s property. To protect against title theft, Home Title Lock allegedly alerts homeowners when documents affecting their home’s title are recorded, avails a “team of experts” if potential fraud occurs, and provides title history reports for free.

The Texas AG based his investigation on company statements Home Title Lock made on its website and in television advertisements. In its CID, the Texas AG requested information substantiating the company’s claims that it (1) provides “nationwide services,” (2) title fraud losses totaled more than “$5 billion in 2015,” and (3) “Title and Mortgage Fraud (sic) are the fastest growing white collar crimes in America,” among others. The AG’s press release also alleged that Home Title Lock directed its marketing efforts to “older customers.”

Why It Matters

The Texas AG’s investigation demonstrates state AGs’ focus on investigating deceptive communications, particularly those made to vulnerable consumers. Companies that disseminate information to the public should therefore be prepared to substantiate any claims to a regulator.