PSA: Loan Scam
Toward the end of 2016, we became aware that the number of loan scams was increasing and our company, loanscanada.ca, was being implicated in the worst possible way. Fraudulent loan companies were posing as “Loans Canada” by using our name to scam consumers. We put out this article, informed our clients and have continued to do our best to provide Canadians all across the country with the information they need to protect themselves and their hard-earned money.
Regrettably, we are back again because these scammers have increased their reach and are changing the way they perform their scams. Our content team’s number one goal is to provide realistic advice, useful information, and honest facts about anything to do with living, earning money, and spending money in Canada.
So, when we write about loan scams and the criminals behind them, it’s because we want to stop them and make sure you have the information and resources you need to help us put an end to these scams. Unfortunately, the scammers have also learned from us and are now using our terminology and verbiage to make their scams seem legitimate.
“No Upfront Payment Required”
As we wrote in our last post about this topic, no legitimate lender, online, private, etc., will ever ask you for an upfront payment or loan insurance of any kind (it is an illegal business practice). And this remains true. But, what’s happening now is that scammers have started to include this phrase in their correspondence with potential borrowers. Here is an email that we received from someone who has been in contact with scammers who are posing as “Loans Canada”.
As you can see, they have clearly written out “NOTE: No upfront payment required to get this loan.” And based on what we have told you in the past, this makes these scammers seem like legitimate lenders.
So How do You Tell Who is Legitimate and Who is Not?
While these scammers try to make it clear right from the beginning that they do not ask for upfront payment in order to provide someone with a loan, after a few emails or phone calls, they do in fact end up asking for upfront payment or fees. Remember, loanscanada.ca, any lenders affiliated with us, or any legitimate lender will never ask for any type of upfront payment before you have your loan.
Learn how to identify a loan scam by watching this video.
A Note About Bank Account Information
To get around this issue, some scammers will legitimately not ask for upfront payment, but instead, they will ask you to provide them with your bank account login information (your bank account number and password) so that they can deposit your loan.
Once they have access to your bank account, instead of depositing money, they will transfer money out of it and you will never hear from them again.
To be very clear, loanscanada.ca, all legitimate lenders, loan agents, or representatives of referral or lending companies will never ask you for the information needed to directly log into your bank account. This is a scam. If anyone posing as “Loans Canada”, another referral company, or a lender asks for direct access to your bank account, do not provide them with the information.
Dealing with Fraud
If you’ve provided a lender who you now suspect to be a scammer, with access to your bank account, here is what you should do:
- Contact your bank right away.
- Authorize a complete stop on any future transaction from the company you suspect is a scam.
- Contact the Canadian Anti-Fraud Centre (CAFC) to report your experience.
The best way we can stop these scammers is by being vigilant. If you are unsure in any way of a lender that you’re working with, stop and ask questions, it’s your money on the line and you deserve to know what’s going on.
Loan Scam Media Reports
Take a look here to see some media reports on loan scams in Canada:
- From the CBC
- From the Toronto Star
Rating of 4/5 based on 10 votes.