Most lenders are legitimate, but predatory and outright fraudulent lenders do exist, and they often target borrowers who feel they have limited options. Knowing the warning signs protects you before you hand over any information or money.
Red Flags to Watch For
- Guaranteed approval before checking any information
- Requests for an upfront fee before funds are released
- Pressure to decide immediately, with no time to review terms
- No clear physical address or licensing information
- Contact only through unofficial channels like text or messaging apps
Verify Before You Apply
Check that a lender is licensed to operate in your province, and search their name alongside terms like "complaint" or "scam" before submitting any personal information.
What Legitimate Lenders Always Do
Disclose the full APR and fees before you accept an offer, perform some form of credit or income check, and never ask for payment before releasing loan funds.
If You Think You've Been Targeted
Stop all communication, don't provide further information or payment, and report the lender to the Canadian Anti-Fraud Centre and your provincial consumer protection office.