February 18, 2022
Buying a home is one of the most fulfilling and exciting times of one’s life. It is an opportunity to build a little financial security, put some roots down and set a good foundation for the next phase of your journey. Almost certainly, it is also the largest purchase you have ever made. So whether you see your investment as primarily financial or one of lifestyle, you want to be sure to take care and protect it.
As always, spammers and scammers will try to find a way to take advantage of this honest and earnest desire to do the right thing. One all-too-common scheme is home warranty letters or postcards. Although this type of advertisement is not illegal, it is extremely deceptive and Cape Cod 5 recommends customers disregard these offers. Their legitimacy is at best questionable and at worst fraudulent. Cape Cod 5 is not affiliated with any “home warranty” company, does not endorse them and emphasizes that a home warranty is not a condition of any mortgage that we underwrite.
Of course, you will be receiving important mail after closing on your new home so to help you discern the legitimate from the misleading, here are some red flags common to the duplicitous marketing used by home warranty companies:
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They can appear official: The name of the lender is on the form, implying that either the lender requires the insurance or that the lender is affiliated with and endorses the insurance provider. Neither of these is true. There is also usually a “property code” or reference number to impart an air of authenticity.
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They demand urgency: Warnings such as “Your warranty may be expiring or even already expired” and “Immediate Response Required” run throughout the letter, conveying the idea that your new big purchase is somehow all of a sudden at immediate risk.
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They use threatening language: Scare tactics such as “We reserve the right to revoke your eligibility” and “You are risking financial liability” are meant to strike fear at a time you are most vulnerable.
Like any other junk mail, you may just throw it away. However, we recommend taking the extra precaution of shredding it if you notice any personal information beyond your name and address. Do not send money or share personal information when you receive unsolicited mail. If you are unsure about whether a letter you received is valid, play it safe by contacting your lender directly—using numbers listed on their website, not the number on the letter.