Watch out for Lenders who ask for a Fee Upfront

By Randall Orser | Small Business

If the pandemic has left you in financial difficulties and you are considering taking out a loan there is some  important information that you should know about advance fee loans. Upfront fees on loans are illegal - If you have bad credit and a loan broker offers to secure a loan for you for a $50 upfront fee, it is illegal for a company to do that according to the Canadian Anti-Fraud Centre.  

The Financial Consumer Agency of Canada has some tips about advance fee loans and some red flags to look out for.

  • Don't pay upfront, legitimate lenders do not usually ask for advance fees.
  • Don't fall for promises that you will get a loan regardless of your credit problems.  If you have a poor credit history then it is unlikely that you will secure a loan without paying large fees.
  • Be careful about emails offering you a loan - they are usually scams.

If you have taken out a loan, paid fees upfront and believe that you might have been scammed you need to report it to your local police or contacting the Canadian Anti-Fraud Centre.

From an article by Consumer Protection BC

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President/CEO Number Crunchers® Accounting Inc. Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.