Last reviewed: 3 October 2026
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United StatesHome warranty sales: tactics and contract terms to slow down on
These are signals the FTC describes in its guidance on service contracts. A signal is a reason to pause and check. It is not proof that a company has done anything wrong.
The short answer
- Pressure to act now: the FTC says marketers use "high-pressure sales tactics, saying things like 'act now, your warranty is about to expire.'"1
- Asked for payment first: the FTC says some try to get "personal and financial information, and maybe even a first payment, before they tell you about the contract."1
- Unclear terms and limits: the FTC says an extended warranty or service contract "won't cover all situations or repairs," and to find out what limits apply.1
- Who stands behind it: the FTC says a contract's value "is only as good as the company that's responsible for coverage."1
How to use this checklist
The FTC calls home warranties "really service contracts."2 Its home warranty alert points readers to its guidance on extended warranties and service contracts, so this page uses that guidance too. A service contract is a separate agreement, bought for an extra fee, to have a product repaired or maintained.1
Each row below pairs something you might notice with what the FTC says about it. The last column is something you can check. None of this tells you a particular company is dishonest. It tells you where to look more closely.
| What you might notice | What the FTC says | Something you can check |
|---|---|---|
| A call or letter says a warranty on a product you bought is "about to expire", from a company that is not the seller | The marketers are "usually not related to the company you did business with." Telemarketing calls are "probably illegal if you have no connection with the company that's calling."1 | Who is actually offering the contract. The FTC says it "might be a company you don't know."1 |
| Urgency: "act now" | "High-pressure sales tactics," with phrases like "act now, your warranty is about to expire."1 | Whether you can read the full contract before you pay anything. |
| Personal or financial details, or a first payment, requested before the contract is explained | Some marketers "might try to get your personal and financial information, and maybe even a first payment, before they tell you about the contract."1 | Whether the full terms are available to you first. |
| A company you do not recognise | The FTC says to find out how long the company has been in business and to search its name with words like "review" or "complaint."1 | Your state consumer protection office, which the FTC says may have complaints against the company.1 |
| You cannot tell what is covered | An extended warranty or service contract "won't cover all situations or repairs." The FTC asks whether accidental damage is covered and whether coverage is for specific parts only.1 | The list of covered items and the limits. If an item is not listed, the FTC says to assume it is not covered.1 |
| Costs beyond the price | Look at costs that "might be hidden, like deductibles or fees you must pay each time the product is serviced," any fee to transfer, and limits on reimbursement.1 | Add the fees to the price. The FTC suggests using the length and cost of the contract to work out a yearly or monthly cost.1 |
| Fees or limits on cancelling | The FTC asks: "Are there restrictions or fees for cancellation?"2 | The cancellation terms in the contract. See our guide on cancellation and refund rights. |
| A slow or hard claims process | Waiting a long time to be paid back "can reduce the value of having coverage."2 A home warranty may make it "nearly impossible to get repairs done when you need them."2 | How to make a claim, who does the repairs, and how long reimbursement takes.1 |
| Coverage you may already have | A home warranty may duplicate coverage you already have.2 | What any existing manufacturer or other warranty already covers. |
If the offer came by phone, mail or text
The FTC says these offers can come years after your purchase. It says the marketers are "usually not related to the company you did business with."1 It says telemarketing calls, both live and robocalls, "are probably illegal if you have no connection with the company that's calling."1 It also says buying from a telemarketer "might be risky" because the company responsible for the contract might not be in business when you need it.1
Our guide on warranty robocalls covers the federal calling rules. It is written about vehicle warranties, but the same agency describes the same pattern for service contracts generally.
If you already have a contract
The FTC advises reading the details. It suggests finding out how to make a claim, who takes care of repairs, and whether the process is slow, because "Waiting a long time to get paid back can reduce the value of having coverage."2 For help with a denied claim, see where a denied home warranty claim can go.
Where to report a problem
The FTC says to report a problem with an extended warranty or service contract to the FTC at ReportFraud.ftc.gov and to your state attorney general.1
Where this fits in our standard
Point 7 of our standard asks about marketing claims that contradict a contract's own exclusions. Point 1 asks about plain-language terms before purchase. The Register reports how we check home warranty providers against these points. It is a method for checking, not a recommendation of any company.
How to verify this yourself
- Read the FTC's Extended Warranties and Service Contracts page (reference 1) and its home warranty alert (reference 2). Every statement above is theirs.12
- Ask for the contract text and read it before you pay. Our pre-signing checklist explains what a federal rule says about seeing warranty text before you buy.
- Look up the company with your state regulator. Our guide on verifying a home warranty company shows how, with Texas and California examples.
- The FTC suggests checking with your state consumer protection office for complaints against a company.1
What this page is not
This is general information, not legal advice. It reports what the FTC says. It does not assess any company, and a signal on this list does not mean a company has broken any rule. It does not say whether a home warranty is worth buying.
What to do next
Before you buy, read the contract, ask who stands behind it, and verify the company with your state regulator. Then compare terms with our contract comparison guide. Start from the home warranty hub or the scams and deceptive marketing hub.