Beware of Home Warranty Scams

Many home warranty scams try to scare people with urgent, threatening letters that appear to come from a home loan company like Coastal, or another mortgage lender.

If you own a home, you’ve probably received a letter about a home warranty at some time or another. A home warranty or extended warranty is a kind of service contract that covers the cost of certain repairs. Some companies that sell home warranties market themselves by sending out letters in the mail, and sometimes they appear to come from their mortgage company, Coastal included.

Your mortgage company, including Coastal, will not send you mail about extending an expiring home warranty. If you receive such a letter, it’s a scam. Coastal does not require homeowners to pay for warranties.

How can I avoid falling victim to a home warranty scam?

The best way to avoid becoming a victim of a scam is to know how to identify it.

You should immediately be suspicious if the company’s marketing is aggressive. While some reputable home warranty companies may mail you marketing letters immediately after you purchase a new home, no one company should send you repeated letters or continue to send them months after you’ve settled into your new home.

Solicitations that use threatening language or unnecessary urgency are almost always scams, as home warranty companies have no way of knowing if you already have a home warranty. If a company you’ve never heard of says your home warranty is expiring, don’t trust it.

What do I do if I’m the victim of a home warranty scam?

Report all home warranty scams to the FTC at ReportFraud.ftc.gov with the Washington State Attorney General’s office File a Complaint | Washington State.