New homeowners can sometimes find themselves overwhelmed at the amount of mail flooding their mailbox, most containing offers and incentives from various service providers.
Often to be found among those letter and flyers, is an offer to register the new resident for a homestead exemption.
When that is the case, being uninformed could mean spending money unnecessarily.
The official looking letter is titled, “Designation of Homestead Request Form” and its format is rather similar to that of a homestead exemption application. Homeowners who receive it are instructed to complete the form and send it in along with a fee.
What appears to be a letter from the Homestead Recording Service is actually a craftily designed solicitation. HRS is not a government agency, nor is it associated with any taxing authority.
To look even more legitimate, the reverse side of the form is filled with relevant text from the Texas Constitution and the Texas Property Code about homesteads. Scammers aren’t usually in the habit of quoting the law, so this seems to add to the credibility of the document.
Also, instead of directly asking for money, like most sales letters, it instructs you to do the opposite. The form states, in all caps, “YOU MUST USE THIS FORM, OR WE WILL NOT PREPARE YOUR DOCUMENT.”
Close inspection of the solicitation usually reveals a disclaimer which states, “Recording a ‘Designation of Homestead’ in public records is optional. To file a designation of homestead, you are not required to use this form or service.” But, recipients of the letter frequently and mistakenly assumed they were required to pay a fee.
The Better Business Bureau offers the following to avoid becoming victimized by schemes which target new homeowners:
- Don’t pay for something that is free. Filing for a homestead exemption is a relatively easy process which can be done for free through the appraisal district, using the Tax Assessor’s Office or even filing online.
- Read each letter carefully. New homeowners will likely be inundated with mail. Look for disclaimers in the small print.
- Don’t share personal information. Scammers often ask for sensitive information that could put you at risk for identity theft. Know who you share your information with.
Anyone who feels they have been victimized by this scam should go to go to www.bbb.org/scamtracker in order to report it and to stay informed on the latest scams affecting consumers and businesses.
Got a question for the BBB? Contact Regional Director Kelly Trevino at email@example.com or call (361) 852-4991.