Press Releases
06/03/2022
Attorney General Tong Cautions Against Potentially Deceptive Home Warranty Advertisements
(Hartford, CT) -- Attorney General William Tong today warned Connecticut homeowners to be on the lookout for potentially deceptive advertisements by home warranty companies. Homeowners may be targets of untrustworthy companies trying to trick them into buying expensive warranties that they don’t need or want.
A home warranty is a type of service contract, also called an extended warranty, that promises to pay out money in the event a homeowner needs to repair or replace components in their home. While some home warranty companies may offer legitimate services, consumers should be cautious. Home warranties may cost hundreds of dollars per year but not provide the coverage homeowners expect, may cover items that are already warrantied, and may impose high deductibles and service fees.
Now, some warranty companies appear to be trying to trick homeowners into signing up by sending letters made to look as if they are from the homeowner’s mortgage lender. The letters might include information including the real mortgage lender’s name and the loan amount, and create a false sense of urgency with phrases like “Final Notice,” “Final Attempt to Notify You,” or “Immediate Response Requested.” The letters may even mention “finance charges” or warn that the homeowner may be “financially liable” without a warranty. This language is meant to make the homeowner afraid that something negative will happen if they do not respond.
The letters typically provide only a toll-free number or P.O. box, and a generic name like “Home Warranty Division,” “Home Warranty Department,” or “Home Warranty Services.” Often, the mailings will suggest that the homeowner already has a home warranty that will expire if they do not contact the sender.
“No one should feel pressured into buying a warranty from an unknown company under false pretenses,” said Attorney General Tong. “A home warranty is never required, and your mortgage company will not send you a threatening letter about buying one. If you receive a mailing from an unidentified sender encouraging you to sign up for a warranty or other service, that is a red flag.”
“As always, we remind consumers to be vigilant about watching for red flags like high pressure sales tactics, threatening communications, or letters from a company they’ve never heard of,” said DCP Commissioner Michelle H. Seagull. “Consumers should take their time, do their research, read any contracts – including the fine print, and make sure any warranty they may choose to purchase makes financial sense for their circumstances.”
Consumers considering a home warranty may wish to consider the following advice:
• Don’t confuse a home warranty with homeowner’s insurance, which mortgage lenders typically require. Homeowner’s insurance covers property damage or liability in the event of an accident; a home warranty generally only provides for repairs or replacement to certain items in your home such as appliances.
• Consider whether you need a warranty. Is there already a manufacturer’s warranty on big-ticket items such as appliances? Does the credit card you used to purchase an appliance provide a warranty? If you built a new home, is the builder’s warranty still in effect?
• Decide whether it makes financial sense to buy a warranty. What is the cap on what the company will pay out when you need it? Do the premiums, deductibles, and service fees exceed what it would cost you to repair or replace items on your own?
• Read the fine print. Are there exclusions that make the warranty less useful, such as for damage caused by wear and tear, manufacturer defects, or natural disasters? Does the warranty provide for replacement of damaged items, or only repairs? Do you get to choose the contractor who makes the repair?
• Look for consumer reviews about the warranty company. The Better Business Bureau (BBB) is a good place to look: have others reported difficulties with customer service, or getting the warranty company to pay claims?
Above all, do not be pressured to sign up on the spot. “Ask to read the contract, not just a salesperson’s promises,” Attorney General Tong said.
Attorney General Tong also warns consumers never to give out personal information such as their address or mortgage or banking information to companies they do not recognize.
Connecticut homeowners who believe they have been harmed by a home warranty company’s advertising are encouraged to contact the Office of the Attorney General at 860-808-5318.
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Media Contact:
Elizabeth Benton
elizabeth.benton@ct.gov
Consumer Inquiries:
860-808-5318
attorney.general@ct.gov