October 3, 2024

Home warranty letters are flooding mailboxes across the country, promising peace of mind to homeowners navigating an uncertain economy. These offers are catching attention as more people seek financial protection against expensive, unexpected home repairs. Review these frequently asked questions to determine if the letter you received is a scam or a real way to protect your finances from a costly home system or appliance breakdown.

Do reputable home warranty companies exist?

Yes. Reputable home warranty companies sell service protection plans that cover repair and replacement costs of home systems and appliances.
 

Who is sending the letters to homeowners?

While some letters are sent by reputable companies offering genuine home warranty services, others are fraudulent attempts to trick unsuspecting homeowners into parting with their money or personal information.
 

Why do I keep receiving home warranty letters?

Most property purchases are a matter of public record. This means that details such as the homeowner’s name, property address, purchase date, and mortgage lender are accessible to anyone who is willing to search county deed records or online databases. Legitimate companies and scammers use this information to send out mass mailings, hoping to catch you when you're most likely to consider home protection services. 

You might receive multiple letters during the first two years of buying a home. It’s possible to reduce these mailings by registering with the National Do Not Mail List or by contacting the company directly and telling them to remove your name from their records.
 

I have a home loan with HawaiiUSA. Did HawaiiUSA sell my personal information?

No. HawaiiUSA does NOT sell, trade, or rent your personal information to third parties. Please read our Privacy Policy for complete details on how we maintain the confidentiality of your account.
 

Are home warranty companies allowed to send these letters?

Home warranty companies are legally allowed to send marketing letters to potential customers. This is considered a form of direct mail advertising, which is protected under commercial free speech laws as long as companies:
  • Provide accurate company information.
  • Respect opt-out requests from recipients.
  • Clearly identify the mailer as an advertisement.
 

How can I tell if the home warranty letter is a scam?

Home warranty scam letters look deceptively real. They might include the property address, a photo of the home, and the name of the mortgage holder. Some might even attach a cash voucher to use toward the warranty purchase. 

However, the language in the letter will stress urgency and invoke fear by claiming that an existing home warranty is expiring or has already expired. Examples include:
  • “Our records show that you HAVE NOT CONTACTED us to get your Home Warranty up to date.”
  • “We reserve the right to revoke your eligibility for service coverage after 5 days.”
  • “Please call us IMMEDIATELY as this will be our FINAL ATTEMPT TO NOTIFY YOU.”
Phony letters often lack a physical address of the company. 

Confirm a letter's legitimacy before responding or providing any personal information. Check the company's Better Business Bureau rating and state licensing status.
 

What happens if I fall for a home warranty scam?

Falling victim to a home warranty scam can be a distressing experience, but there are steps you can take to mitigate the damage. File a complaint with the Better Business Bureau and your state's consumer protection office. If you made a payment using a credit card, contact your financial institution immediately to dispute the charges. It's also crucial to monitor your accounts closely for any suspicious activity. 

It can be hard to tell whether a home warranty letter is real or a scam. Members are encouraged to contact their existing home warranty provider to explore coverage options. Contact us if you have questions about your HawaiiUSA mortgage, home equity loan, or home equity line of credit.