Consumer Alert – Before Getting A Loan Make Sure the Lender or Broker is Licensed
The Financial and Consumer Affairs Authority (FCAA) would like to warn consumers about unlicensed lenders or brokers who are taking advantage of people’s financial positions during COVID-19 pandemic and are offering fake loans online and using aggressive collection practices.
Some unlicensed lenders or brokers are promoting “advance-fee loans” online or by email to consumers and requiring fees be paid upfront before they release the funds. Lenders or brokers may use the terms “administration fee” or “credit protection” to make the charge seem more credible. When the consumer pays the fee, the loan is never transferred and the website often disappears. Other unlicensed online lenders may issue loans but not provide accurate cost of credit information or may take aggressive collection practices.
In Saskatchewan, the FCAA regulates many licensed entities that offer or arrange loans: payday lenders, loan brokers, credit unions, loan corporations and financing corporations. If a consumer is going to obtain a loan, they should ensure the lender or broker is authorized to operate in Saskatchewan. To check whether a lender or broker is licensed, consumers should visit FCAA411 at https://fcaa.gov.sk.ca/fcaa411.
Here are some red flags that indicate a consumer might be dealing with an unlicensed lender or broker:
- The lender or broker is not licensed with the FCAA;
- They pressure you to act immediately;
- The offer is “too good to be true.”
If a consumer has a question about whether a lender or broker is allowed to operate in Saskatchewan, they can contact the Consumer Credit Division at 306-787-6700 or firstname.lastname@example.org. If a consumer has a question about banks, they should contact the Office of the Superintendent of Financial Institutions, as they regulate all banks in Canada.
For more information about licensed lenders or brokers visit www.fcaa.gov.sk.ca.