One way consumers may be charged more than they should be is in their insurance. California insurance companies must complete a Filed Rate Doctrine, in which they set out what rates they will charge. If a customer is charged more than the rate filled out on the doctrine - or if they are charged for a service not included on the doctrine - the customer is being overcharged, and the insurance company could be in violation of insurance regulations. Consumers who were overcharged on their insurance may be able to file a lawsuit to recover the overcharges.
But insurance is not the only area where illegal fees or transactions can be found. Some real estate transaction fees are capped at a limit, while other charges are illegal. Because there are so many charges and fees involved in closing a real estate transaction, many people do not question the charges, but they may have been charged hundreds of dollars in illegal or excessively high fees. A HUD-1 form (Department of Housing and Urban Development Form 1) can show whether a customer was charged any illegal or unnecessary fees as it sets out what money was paid to whom in the real estate transaction process.
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But if the agent received any sort of gift, compensation or inducement from service providers for the referral, that is a violation of the Real Estate Settlement Procedures Act (RESPA).
Buying or selling a home is a stressful - and expensive - enough process without customers being charged illegal or excessive fees. Consumers who bought, sold or refinanced a home in California in the past four years may want to look at their transaction records to see if they may have paid illegal fees.