Consumer complaint received 2024-06-10 00:00:00
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: SOUTHSTATE BANK CORPORATION
State: NC

Complaint narrative:
On XX/XX/XXXX, SouthState sent me a notice requesting proof of Homeowner 's Insurance for a HELOC account I have with them. The notice explained their records showed my insurance expired and that they had no evidence that I had coverage in place. The fact is, my annual homeowner 's insurance policy RENEWED ( which is does every year ). This renewal of XXXX XXXXXXXX XXXX insurance on my home and connected with my SouthState HELOC account happens every year. I have never received a notice like this forcing me to produce proof of insurance records. While having to produce these records and resolve this matter is a nuisance and inconvenience, that is not why I am issuing this complaint. The SouthState notice went on to include the following languange ; - " ... we plan to buy insurance for your property. You must pay us for any period which the insurance we buy is in effect but you do not have insurance. '' - " The insurance we buy : a ) May be significantly more expensive than the insurance you can buy yourself. b ) May not provide as much coverange as an insurance policy you buy yourself. '' - " You should immediately fax or email proof of insurance for your property. '' The email address provided to me to send my insurance verification proof, " XXXX '' is not to a SouthState email domain and honestly is a very suspicious email address causing fear that this was a scam.

When I called SouthState, the agent pulled my XXXX XXXX XXXX XXXX  policy information in less than XXXX min. and validated it was active and informed me to " disregard the letter. '' I informed the SouthState employee that I have never received a notice like this in prior years and that my insurance policy had not changed. I asked why someone in their department would not have contacted XXXX to validate my information and avoid the threatening and incendiary letter that caused fear, inconvenience and a burden on their customer. No explanation was provided. 

I submit this type of communication is predatory and incites fear and stress to the consumer and was only generated due to a failure of SouthState to complete a 2 minute administrative task which should be part of their annual servicing process. I asked the agent to explain what would have happened had I not called to resolve this. The agent explained that I would have gotten two more notices. If no response to those notices, SouthState would have invoked " Forced Insurance '' ( the words the agent used ). This would have happened even though the homeowner 's insurance policy for my property ( and connected with this loan ) was valid and had not changed, it simply renewed. I would have been " Forced '' by SouthState to pay insurance they purchased for my property that was not needed, was more expensive, and did not provide sufficient coverage. In short, they would have over-insured/duplicate-insured my property and charge me " forced '' premiums for insurance that was not needed. 

Financial Institutions should not be permitted to put this type of unnecessary and unneeded burden on their consumers who, if they do not take action, will be forced to pay the financial institution for insurance that is not needed.

Company response to consumer: Closed with explanation