Which practice is prohibited by the Real Estate Settlement Procedures Act?

The Real Estate Settlement Procedures Act (RESPA) aims to protect consumers in the real estate settlement process and to eliminate certain abusive practices. One significant component of RESPA is its prohibition against kickbacks or referral fees that can lead to inflated costs for consumers.

Receiving a referral fee from a service provider is specifically prohibited because it can create conflicts of interest and undermine the transparency of the real estate transaction process. Such fees can incentivize agents to recommend certain services not based on the quality of those services but rather on the financial gain received from the referral, which can ultimately harm consumers by increasing their overall costs.

In contrast, practices like providing free consultations, charging for market analysis, or offering discounts for early payment do not inherently violate RESPA. These actions do not involve referral fees tied to the settlement process and can be part of standard business practices in the real estate industry. Therefore, the correct answer highlights a key regulation intended to maintain fairness in real estate transactions.