Scammers use high-pressure tactics to urge immediate renewal, creating a sense of urgency by threatening loss of coverage if action is not taken immediately. One sneaky way they try to lure in victims is with a notice that your warranty is expiring and you might not even have one!
Not to be confused with homeowners insurance, a home warranty is a contract between a homeowner and a home warranty company that covers the repair or replacement of certain home systems and appliances.
You might receive a call or a letter claiming your home warranty is about to expire, urging you to renew immediately. They might use high-pressure tactics, claiming you’ll lose coverage or be on the hook for expensive repairs if you don’t act NOW! Sounds alarming, right? But here’s the catch: these scammers are often not affiliated with your actual warranty provider and could be looking to steal your money or personal information.
Scammers are creative. Their scare tactics lead to a lot of stress and confusion and it can be overwhelming when you're bombarded with urgent requests. If you respond to a fraudulent request, you could end up paying for a warranty that doesn't exist or sharing personal information that the scammer can use to commit identity theft.
We recently got our hands on one of these sneaky letters, so we're going to use this real example to highlight some red flags:
Note the "Private and Confidential", "Final Notice", and "Response requested". This alone may not be that alarming, but the language is designed to elicit a sense of urgency and make you think you need to act now!
In the body of the letter, we have more urgent language. Fraudsters prey on emotional responses; fear and financial loss are common, effective tactics often used by scammers.
Did you notice the grammar errors? Things like random capitalization, spacing errors, and improper use of punctuation are red flags.
Another item of note in the letter is the Lender Information. In this case, Osgood Bank may or may not be the holder of the home's mortgage. In some cases, the information is correct and in some cases it is not.
The individuals sending out these notices are tapping into publicly available information to gather the details they possess. Mortgages are officially recorded at the county level, making this information part of the public record. Incorrect information in this field is a red flag. Correct information in this field does not necessarily indicate a data breach.
Finally, let's take a look at the footer of the letter.
The screenshot might be a difficult to read, but once again the sender is using bad grammar and the fear of financial loss to get you to take immediate action.
Finally, the second to last line states "Not all consumers have previous coverage. We are not affiliated with your current mortgage holder." After all of that fear-mongering, we learn that you may not even have an existing policy and the sender is not associated with the Lender whose information they used to get your attention!