$12.5B
FTC-reported fraud losses in 2024
FTC says consumers reported losing $12.5 billion to fraud in 2024.
home warranty upsell scam
Telemarketers aggressively sell overpriced home warranty plans to new homeowners, promising comprehensive coverage that is riddled with exclusions and denial triggers.
“extended warranty scam”
↑ 284%Key indicators
Usually targetsHomeowners
Often hitsFreelancers and contractors
Common regionUnited States
Last updated2026-04-04
Estimated impact
$640
median reported loss
Typical range$40 – $4.0K
Recovery rate~15%
Scam breakdown
1
Companies purchase public real estate transaction records to identify recent homebuyers and target them with warranty sales calls
2
High-pressure sales tactics create urgency, claiming the home systems could fail at any time without coverage
3
Once enrolled, homeowners find that claims are routinely denied due to pre-existing conditions or coverage exclusions buried in fine print
What to do first
Research any home warranty company thoroughly on BBB, state insurance department records, and consumer review sites before purchasing
Related terms
home service contract scamnew homeowner warranty pressurehome protection plan fraudWarranty scamsPhoneRisingHomeownersNew homebuyersConsumersFreelancers and contractorsReal estate professionals and homebuyersRetirees and seniorsUnited Stateshome service contract scamnew homeowner warranty pressure
Real-world example
How this scam plays out in practice
Based on reported patterns. Names and details are illustrative.
The setup
Daniel, 42, a homeowners, encountered what appeared to be a legitimate warranty scams situation while using Phone. Companies purchase public real estate transaction records to identify recent homebuyers and target them with warranty sales calls
Step 2
What happened next was calculated: High-pressure sales tactics create urgency, claiming the home systems could fail at any time without coverage
Step 3
The pressure escalated quickly: Once enrolled, homeowners find that claims are routinely denied due to pre-existing conditions or coverage exclusions buried in fine print
The outcome
Daniel realized something was wrong when telemarketer calls within days of closing on a new home, suggesting they obtained your data from public records. By that point, significant damage had already been done — money sent, personal information shared, or trust exploited.
The lesson
Research any home warranty company thoroughly on BBB, state insurance department records, and consumer review sites before purchasing Daniel's experience shows why telemarketer calls within days of closing on a new home, suggesting they obtained your data from public records and coverage is described as all-inclusive but the written contract contains pages of exclusions are the clearest early warning signs.
How to identify it
- Telemarketer calls within days of closing on a new home, suggesting they obtained your data from public records
- Coverage is described as all-inclusive but the written contract contains pages of exclusions
- Company has numerous complaints on BBB or consumer review sites about denied claims
- Pause before paying, clicking, or sharing information. Scammers rely on speed.
- Verify the sender, company, or agency using a phone number or website you already know is legitimate.
- Treat secrecy, urgency, and off-platform payment requests as strong scam signals.
What to do now
- ✓Research any home warranty company thoroughly on BBB, state insurance department records, and consumer review sites before purchasing
- ✓Read the full contract including all exclusions, caps, and claim procedures before signing
- ✓File complaints with your state attorney general and the BBB if claims are unfairly denied
What to save before reporting
- ✓Save the message, profile, phone number, email, or URL that was used.
- ✓Keep payment confirmations, receipts, and account alerts before you dispute or delete anything.
- ✓Write down the timeline while the details are still fresh.
- ✓Save the full chat or call log before blocking the sender so the reporting path still has the original context.
How big is this problem
You are not alone — this scam affects millions of people.
These numbers come from government agencies and official reports. If you have been affected, know that this is a widespread problem — not something that only happens to careless people.
FTC 2024 fraud losses
Imposters
Most common FTC fraud category in 2024
FTC says imposter scams remained the most commonly reported fraud category in 2024.
History and evolution
- This scam family tends to persist because the social-engineering pressure works even when the exact scripts, platforms, and payment methods change.
- The specific packaging evolves over time, but the core pattern usually stays the same: create urgency, control the channel, and push action before verification.
- The BBB reports that home warranty companies are among the most complained-about business categories, with thousands of complaints filed annually about denied claims
Recovery and follow-up
- ✓Save the messages, receipts, account alerts, and transaction details before you block or delete anything.
- ✓Report the scam through the official platform or government channel that best matches where it happened.
- ✓Tell close contacts if a phone or text scam used your identity, so scammers cannot reuse the same story against people around you.
- ✓Research any home warranty company thoroughly on BBB, state insurance department records, and consumer review sites before purchasing
- ✓Read the full contract including all exclusions, caps, and claim procedures before signing
Why this pattern keeps working
Even when the story changes, most scams still use the same pressure pattern: urgency, authority, and a request to move money or data fast.
The BBB reports that home warranty companies are among the most complained-about business categories, with thousands of complaints filed annually about denied claims
BBB Scam Tracker 2025
Where to report it
If you have been targeted by this scam, reporting it helps authorities track the pattern and protect others. United States has dedicated agencies that handle fraud reports.
ReportFraud.gov
Federal Trade Commission
Central U.S. consumer fraud reporting portal.
File an IC3 complaint
FBI Internet Crime Complaint Center
FBI portal for internet-enabled crime reports.
Start identity theft recovery
IdentityTheft.gov
Official U.S. identity theft recovery plan builder.
Explore further
Understand the bigger picture
Who is most at risk
Who this scam targets
Primary targets
Homeowners, New homebuyers, Consumers
Geographic concentration
United States
Primary channel
Phone — Warranty scams
Why this group is vulnerable
Homeowners are particularly vulnerable because this scam exploits trust in familiar brands, authority figures, and time-sensitive decisions. The growing number of reports suggests that awareness among this demographic remains low.
Sources and methodology
How we verify this information
OpenScam tracks scam patterns using a combination of government consumer protection databases (FTC, IC3, Action Fraud), platform-specific fraud reports, and verified consumer complaint data. Each entry is cross-referenced against at least two independent sources before publication.
Severity ratings are based on financial impact potential, reversibility of damage, and volume of reports across multiple reporting channels. Trend velocity reflects the rate of change in report volume over the most recent 90-day window.
This page was last verified on 2026-04-04. Red flags, recovery steps, and reporting resources are reviewed quarterly against current agency guidance.
Evidence and indicators
- The BBB reports that home warranty companies are among the most complained-about business categories, with thousands of complaints filed annually about denied claims
Source notes
- BBB Scam Tracker 2025
Frequently asked questions
Common questions about home warranty upsell scam
How does the home warranty upsell scam work?+
Companies purchase public real estate transaction records to identify recent homebuyers and target them with warranty sales calls High-pressure sales tactics create urgency, claiming the home systems could fail at any time without coverage Once enrolled, homeowners find that claims are routinely denied due to pre-existing conditions or coverage exclusions buried in fine print
What are the warning signs of home warranty upsell scam?+
Telemarketer calls within days of closing on a new home, suggesting they obtained your data from public records Coverage is described as all-inclusive but the written contract contains pages of exclusions Company has numerous complaints on BBB or consumer review sites about denied claims
What should I do if I encounter home warranty upsell scam?+
Research any home warranty company thoroughly on BBB, state insurance department records, and consumer review sites before purchasing Read the full contract including all exclusions, caps, and claim procedures before signing File complaints with your state attorney general and the BBB if claims are unfairly denied
Who is most at risk for home warranty upsell scam?+
This scam primarily targets Homeowners, New homebuyers, Consumers. It is most commonly reported in United States and typically appears on Phone.
Is home warranty upsell scam on the rise?+
home warranty upsell scam is currently on the rise with growing reports. It has been reported across US. Last updated 2026-04-04.
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Help someone avoid this scam.
Scammers succeed because people do not talk about it. If you or someone you know has been affected, there is no shame in it — it happens to millions of people every year. Share this page with friends and family so they know what to look for.