Archive for April 2011

Colorado Secretary of State Alerts Business Community about Deceptive Mailings

Earlier this month, the Colorado Secretary of State (CO SOS) issued an alert to the Colorado business community regarding deceptive mail solicitations. The official-looking documents request a $225 annual fee to file reports with the Secretary of State’s office and use stress-inducing words like "noncompliant" and "delinquent" in order to elicit a response. According to the CO SOS, in most cases, the annual fee is merely $10 if filed directly with the Secretary of State’s office. That's quite a profit these clever scam artists are making, huh?

The documents, which are titled “Periodic Report,” are creating confusion for many Colorado-based business who are being urged to keep an eye out for these deceptive solicitations. The documents are being sent out by an entity calling itself the “Corporate Controllers Unit.” Please be aware, that these forms are not required by the Colorado Secretary of State’s Office. If you would like to review your entity’s records, please visit the CO SOS's web site.

To view a sample of one of these solicitations, click here.

As always, feel free to give us a call if you have ANY questions about documents you may receive—from us or another party. We’re happy to help make sure you don’t get caught in one of these costly scams! We can be reached toll-free at 800.533.7272.

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Mississippi: Annual Reports Deadline Approaches

This is the first year limited liability companies (LLCs) are required to file an annual report with the Mississippi Secretary of State (MS SOS). The deadline to file both LLC and corporate annual reports is April 15, 2011. Failure to file by the deadline may lead to the LLC or corporation being administratively dissolved. In order to submit an annual report, you will need your company’s business identification number, which can be found on the MS SOS web site.

Mississippi domestic LLCs are not required to pay a filing fee with their annual report, however; there is a $250 filing fee for out-of-state or “foreign” LLCs. The fee to file a corporate annual report (both foreign and domestic) is $25. If you have any questions or need assistance filing your annual report, give us a call at 1.800.533.7272 or send us an email.

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Senate Bill 133: “The Strictest Law in the Nation on Rebates” and its Effect on Title Marketing

About the author: Ian Sierchio came to Parasec with over seven years experience in the medical and advertising industries. After his years in the advertising industry, on both the state and national levels, he decided to transition into the legal field as a way of satisfying his insatiable thirst for knowledge. Parasec and the wide breadth of its covered service areas have not disappointed. With Parasec’s many departments, covering work in many states, Ian has a never-ending area in which to learn and grow. In addition, spearheading our research and development allows him to uncover new service areas moving forward.

On January 1, 2009, a bill (SB 133) regulating the marketing of title insurance went into effect in California. As a result, solicitation of title business from real estate brokers and agents has been restricted heavily in the hopes of limiting activities which would induce referrals. There are arguments for and against this law, and the trickle-down effect it has had on the real-estate industry. Other states are taking notice of the changes and it is likely that similar bills will be introduced across the nation.

The summary statement from the bill reads as follows: “Would establish procedures for obtaining and renewing a certificate of registration as a title marketing representative, as specified; prohibit a person from marketing, offering, soliciting, negotiating, or selling title insurance in California without a valid certificate of registration as a title marketing representative; and place limits on the value of items that title marketing representatives are allowed to provide to those in a position to refer business to the title insurers they represent.”

This means that all title company sales or title representatives are now required to be licensed with the California Department of Insurance (CDI). The reps as well as the title companies themselves are now subject to fines. Additionally, the reps are also subject to suspensions/revocations if found in violation of the law. If a rep’s license is revoked, the offender cannot reapply for five years from the date of revocation.

Prior to SB 133, the CDI had no enforcement authority over the individual title marketing representatives who engaged in illegal rebating activities. While these practices were still technically illegal, the department only had the ability to fine the title insurers. The CDI is now authorized to bring administrative actions against the sales reps and title insurers who engage in these practices.

One fear was that this type of activity could be viewed in some cases as commercial bribery, which is a crime under the California Penal Code. Another fear is how expensive these “crimes” can be for a title company, which can be fined up to five times the amount of the expense. The law establishes zero tolerance for enticing realtors and lenders with anything that can be construed as an inducement to refer title business. This includes:

· Providing meals
· Purchasing tickets to sporting events
· Purchasing advertising on behalf of an agent or broker
· Creating/providing marketing materials on behalf of an agent or broker
· Distributing any item with monetary value (gift cards, event tickets, car washes, etc)
· Providing unlawful rebates (quote or charge under their filed rate with state of CA)

Many title companies, which have provided “accommodation” work in the past at no charge to law firms, lenders and other real estate-related companies; are now afraid these services could be a violation of the law. Not willing to expose themselves to the potential risks involved, they’re turning to Parasec and other public records filing and retrieval companies, which are then supplying companies with these types of documents.

With the filing and retrieval of deeds no longer being performed gratis, our industry is seeing an influx of outside referrals from our title company clientele. The title companies want to help, but to do so directly exposes them in a way they are not willing to risk. Real estate law firms, lenders and others are now left to fend for themselves while attempting to deal directly with other counties and even states in certain situations They’re spending precious time, money and manpower on a service they’ve been handed for years.

Parasec offers a variety of commercial title support and real-estate-related services to a wide range of businesses, including title companies, developers, lenders, asset managers, pension advisors, real estate attorneys, investors and banks. Title companies certainly offer many of the services Parasec specializes in, but we find that even title companies choose to outsource this “accommodation” work to us.

With the enactment of this law, we are finding new services we can assist with on a regular basis. Parasec is not a title company and this type of accommodation work is what we specialize in. We do not insure or underwrite projects in any way—we simply provide the accurate and timely information needed for the job at hand. From a standard Chain of Title report to a Full Commercial Search to simple Mechanics Lien searches, Parasec is happy to assist you in California and every other state.

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The Alert is Out!

The latest issue of our newsletter, the Alert, is now available. We make it our goal to keep you updated on important developments in the legal arena. Plus, enjoy interviews with paralegals from Gray Robinson PA (Jacksonville, Florida) and Quateman, LLP (Los Angeles, CA). Check it out online here.

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CA SOS Backs Bill to Stop Deceptive Business Solicitations

Throughout the years, the California Secretary of State (CA SOS) has issued many customer alerts regarding deceptive solicitations aimed at those doing business in the Golden State. In fact, the attorney general has received upwards of 1,000 complaints regarding these fraudulent solicitations. Most of the scams have involved similar tactics, including the mailing of official-looking documents warning that if the forms are not returned with payment by a certain date, the companies will risk loss of their status with the state of California. The fees requested in the scams have sometimes been as high as $495.

There is currently a bill (AB 75) making its way through the legislature that would require third-party vendors to include more obvious disclaimers on their solicitations. The disclaimers would make it clear that the documents received are not government documents—hopefully preventing more businesses from falling prey to these types of scams.

Secretary of State Debra Bowen is requesting support to ensure AB 75 makes it to the Governor's desk and is signed into law. Bowen is urging Californians to submit support letters to their legislative representatives. To view several sample letters urging your chamber to support this legislation, go here.

Parasec has been working for at least the past couple of years to get the word out about these ongoing scams and will continue to try to warn our clients about the potential for being deceived by these clever scam artists. Please feel free to give us a call at 1.800.533.7272 if you have any questions about documents you have received.

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