The Financial and Consumer Services Commission (FCNB) is warning about an organized loan scheme targetting some New Brunswick homeowners.
Individuals posing as credit brokers are offering to help people secure a loan to pay off debt by falsifying an application for a home renovation loan.
Alaina Nicholson, director of consumer affairs, said the scammers may inflate building material prices to increase the loan amount, and charge high fees and commissions.
“The individuals orchestrating this scheme are very skilled in influencing the borrowers,” Nicholson said in a news release. “In many cases, they convince the homeowner to sign fraudulent documents saying it is common practice, and the borrower may not fully understand what they are agreeing to.”
Nicholson said those orchestrating this scheme are very skilled in influencing the borrowers, many of whom are older adults on a fixed income.
In many cases, they have a pre-existing relationship with the homeowner and know the homeowner to be in financial hardship, said the commission.
Those affected by the scheme are left to repay the full loan amount with interest, including thousands of dollars in fees or commission.
Nicholson said it is important for New Brunswickers to always be honest on a loan application.
“Providing false information on a loan application is lender fraud,” she said. “Once you sign for a loan, you have entered into a legally binding agreement and are responsible for the repayment of that money plus interest.”
In New Brunswick, individuals must be registered with FCNB if they are helping people secure loans and are charging a fee or commission for the service, also known as brokering credit.
FCNB encouraged you to contact them to verify that the broker is registered to operate in the province.
They also encourage you to get an independent, professional second opinion by consulting with a third party, such as a lawyer or financial institution.
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