Fighting Fraud
By Better Business Bureau Serving Greater Cleveland
Local consumers have alerted Better Business Bureau® Serving Greater Cleveland (BBB®) that they have received alarming notices in the mail regarding expiring home warranties. The notices vary in style, but the messages are the same. They contain language urging the recipient to “call IMMEDIATELY” and that the letter is a “FINAL ATTEMPT TO NOTIFY.” The letter states, “Without a home warranty in place, you are at risk of being financially liable for any and all repairs.” These mailings, designed to resemble correspondence from a current mortgage holder, are actually direct mail advertising pieces. Some include official-looking “Registration Fee” vouchers, which have misled consumers into thinking they were dealing with their actual home warranty provider.
A South Euclid consumer reported he lost $195 after receiving a postcard in the mail. He told BBB he signed up for a “home warranty with the business, not knowing it was a scam.” Another consumer from Bedford Heights contacted BBB after he received one of these advertising pieces and had a similar story. He told BBB he “received a one-page letter with no business address information, on the sent envelope or the letter itself, other than a name, ‘Home Warranty Dept’…On the top of the letter was a Registration Fee Voucher…I called the phone number and talked to a representative who informed me ‘All homes have warranties.’” The consumer told the representative that he knew he had a warranty through another company and he wasn’t sure about this particular warranty. The representative told him the home warranty renews every three years, wished him the best of luck, and hung up.
BBB has linked some of these misleading mailings to a business named “Home Warranty Division” based in Clearwater, Florida. This business currently has an “F” rating with the BBB due to concerns with the business’s practices, the number of complaints the business has received, and the length of time the business has been operating. BBB has been unable to determine the business’s physical location and advises people to use caution when dealing with businesses that do not disclose their physical address.
Legitimate home warranties typically cover repairs to major appliances or home systems such as plumbing, electrical and HVAC. These plans, varying in coverage, are often encountered during home purchases. Consumers can choose to buy plans for new constructions or aging homes. Importantly, home warranties are managed by third-party companies, not local governments. Consumers will never receive mailings from county or state officials regarding expiring home warranties. It is advisable for consumers to contact their current home warranty provider with any questions and to disregard such notices.
For more information about purchasing a home warranty, visit BBB.org. Have additional questions? Reach out to your BBB at 216.241.7678 or [email protected]. Have a scam to report? Report it to BBB.org/ScamTracker.
