If you’ve received a letter claiming that your home warranty is about to expire, you might be the target of an attempted scam. Scammers routinely prey on homeowners who recently moved into new homes by means of phishing messages, deceptive websites, or other methods of correspondence. In this guide, we’ll show you how to properly spot home warranty letter scams to keep you, your family, and your assets safe.
Home warranties are service contracts that cover repairs and replacements of appliances and home systems that break down due to normal wear and tear. They typically cover HVAC, plumbing, and electrical systems but may also extend to appliances such as dishwashers, refrigerators, and ovens. Paying a predictable plan cost each month or year can help you avoid significant, unexpected repair costs on covered items down the line.
As long as you sign up with a reputable home warranty provider, the company will uphold its end of the contract. However, homeowners should read their home warranty contracts carefully. No home warranty covers all types of damage to all systems and appliances. These contracts contain exclusions, service fees, and coverage caps. Before buying, make sure that the benefits of signing up for a predictable premium outweigh the risks of a significant repair bill.
It can be challenging to identify home warranty scam letters since they frequently look like the products of legitimate businesses. Learning to identify commonplace scam tactics will help you better protect your money.
Reputable companies don’t use high-pressure sales tactics to get you to buy a home warranty. Never respond to unsolicited calls, emails, or time-sensitive letters that urge you to provide credit card information or your Social Security number.
Legitimate home warranty companies provide contracts that outline coverage details, exclusions, service fees, and claim procedures. Always ask for a sample contract, and read the terms of your own contract before paying. If the contract you get is riddled with vague or complex language, don’t proceed.
Beware of home warranties that lure you in with low prices now but hidden fees later. Service call fees, deductibles, and coverage limitations are all parts of legitimate home warranties, but they should be clearly stated in advance. Read the fine print to ensure that there are no hidden or increasing fees.
Research any home warranty company you’re considering online before buying a service contract. Read reviews from independent review sites to see what other homeowners say about the company’s service and claim resolution process. Check the company’s BBB page for its rating and accreditation status. If you can’t find any reviews or information about the provider entity, that’s a red flag.
Legitimate warranties typically offer service guarantees. Usually, this means that if the problem comes back within 30 days, the company will send another technician with no additional service fee. Don’t proceed if the contract lacks any guarantees or if you notice limited warranty coverage.
A reputable home warranty company has a transparent claims process and responds to claims in a timely manner. If many customer reviews say that filing claims is especially difficult with a particular company, this should serve as a red flag.
Legitimate home warranty companies send qualified, licensed technicians to your home. Ask a potential company about the qualifications of its technician network to make sure that skilled technicians will perform any covered repairs. The technicians should be background-checked and insured.
Scammers use unsolicited home warranty letters to target potential victims. These letters arrive in your mailbox and frequently appear right after you purchase a home. They are typically an attempt to trick you into signing a home warranty contract with unfavorable or even fraudulent terms. Here’s how to spot them:
Scam letters often look like messages from legitimate companies and feature company letterhead, logos, and branding. Scammers often use bold red font to convey urgency and try to get you to act. There may be a call to action that implies there could be dire consequences. The paper on which scammers print messages is usually cheap to help save on costs, so the letter might feel thin or flimsy. Alternatively, the letter may look like a check with tear-off sides.
Many letters include accurate information about your property, including the name of your mortgage lender. Don’t be fooled by this information. Scammers can access these details in publicly available county deed records and use them in letters to trick you.
Scam letters use scare tactics in their language, such as “final notice” or “coverage will lapse,” to pressure you into signing a deal. Look for vague language since scam letters will be purposely ambiguous.
Scammers might claim to be a part of your mortgage company’s home warranty division to appear more credible. Do not call the number or contact any email address provided in the letter. Ask your homeowner’s mortgage company directly if it sent you a letter.
Additionally, some scam letters have small print at the bottom reading “Not all consumers have previous coverage. We are not affiliated with your current mortgage.” This is an acknowledgement that you do not have an existing relationship with the scam company, nor does your mortgage lender. Not all scam letters will have this language, but it is a sign that a shady company is trying to fool you into signing an unnecessary contract.
Do your research. If you want a home warranty, research companies on sites such as the BBB or Trustpilot. Look for companies that have a history of positive reviews.
Don’t respond to unsolicited offers. Legitimate home warranty companies won’t pressure you through unwanted letters, emails, or phone calls.
Get home warranty advice from your real estate agent, home inspector, or mortgage company.
Ask for quotes from at least three reputable companies. Don’t accept the first offer you receive for a home warranty. Compare coverage details and pricing before making a choice.
Verify company information. If a company claims to be affiliated with an organization such as the BBB or your mortgage company, verify the claim before proceeding.
Home warranty scams have been around for nearly as long as legitimate home warranties. Scammers started by issuing solicitations through telemarketing calls but have begun using phishing letters and deceptive websites. Scams may come via USPS letters, emails, or texts, so stay aware across multiple channels. Modern scammers use data breaches to access homeowners’ personal information and generally target older adults and new homeowners.
Consumer protection organizations such as the Better Business Bureau (BBB), government agencies, and local news outlets regularly warn homeowners about potential scams. You can protect yourself by staying informed about current scams and being aware of warning signs.
If you suspect that you’ve been targeted by a home warranty scam, report it to:
Home warranty scams are common and frequently target older adults, new homeowners, and vulnerable populations. Watch out for fake letters that use urgent language and offer vague coverage terms since these are signature signs of a scam. If you suspect that you’ve received a phony home warranty letter, contact the BBB or FTC and report the suspicion to your state attorney general’s office.