Residents warned to beware of frightening fake loan scam in Mississauga

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Loans Canada is warning prospective applicants about a scam targeting loan seekers that has increased in frequency recently.

The scammers are using two methods to con people into giving them money they might not even be able to afford under the guise of receiving a loan.

One method involves sending a fake contract to people who have applied for a loan with many large lending companies including Loans Canada.

“People receive loan contracts from scammers impersonating our brand. These scammers send people who have applied for a loan a contract using our brand, but they ask for an initial payment--either for insurance or a down payment for the loan. Once the person sends the money, they never hear from the scammers again,” Cris Ravazzano, Chief Technological Officer for Loans Canada, said in a phone interview.

After receiving the fake loan contract, the scammers will inform the victims they need to make some form of up-front payment to receive their loan. This is not common practice among legitimate lending companies. According to Ravazzano, Loans Canada will never ask for an up-front payment for an unsecured loan.

Additionally, similar to the Canada Revenue Agency (CRA) scam, which is a phone scam where people get phone calls from scammers pretending to be from the CRA, these scammers impersonating Loans Canada are asking for payments in the form of unconventional methods.

“The people imitating our brand often ask for payment in the form of iTunes gift cards--something that a legitimate loan agency would never ask for,” Ravazzano says.

According to Ravazzano, the people being targeted by this scam are in a weak financial position, either due to a low income, or a poor credit rating.

“When these people fall for these kinds of scams, and they’re already strapped for cash, it makes things worse for them and they sometimes can’t pay their rent or their monthly bills. This makes their financial profile even worse than it was to begin with, and it becomes that much harder for them to qualify for loans in the future,” Ravazzano says.
The second part of the scam involves fake websites being set up by scammers that impersonate legitimate lenders’ websites.

“They’re also targeting people who aren’t very tech-savvy and can’t distinguish between a website for a legitimate loan company and one set up by a scammer,” Ravazzano adds.

While many of these websites clearly appear to be fake, some of them can appear legitimate.

“Some fake lender websites will go as far as to put warnings on their sites, as we do on ours, urging people not to give an up-front payment for an unsecured loan. So, some of the websites can appear to be legit,” he continues.

However, while these websites will claim they don’t ask for any form of up-front payment, they always do, which is a clear sign it’s a scam. “If they ever ask for money upfront, you know it’s a scam,” Ravazzano says.

Another way to tell if the loan contract you received might be a scam is to check the email address it was sent from.
“If the email comes from a Gmail or Hotmail address, it’s a pretty clear indication that it’s a scam--most companies will have their own company email address, they won’t be using Gmail or Hotmail accounts,” Ravazzano says.

Unfortunately, once someone falls victim to a scam like this, there’s virtually no way to get that money back. “There are ways to report it--either to the RCMP or other agencies that deal with fraud--but once you give a scammer money, it’s gone,” Ravazzano says.

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