In any industry there are going to be people that want to take advantage. Now sadly, the same is happening with mortgage brokers, and it’s gotten so bad that FSCO has gotten involved.
FSCO is the Financial Services Commission of Ontario, and they oversee the insurance and pension industries in Ontario. They’re also responsible for licensing, compliance and enforcement of any company that falls within their industry’s jurisdiction. Most recently that’s what they’ve had to do with illegitimate mortgage brokers that aren’t licensed and have no business collecting people’s money, but they do it anyway as an easy and dishonest way to make a few bucks. Now FSCO is warning you about these fraudsters, and telling you how you can protect yourself.
“The guys who post the signs on the street posts, under the street lamps, they are preying on people in dire financial situations,” says Bhan Persaud, senior licensing approvals officers with FSCO. “All we can do is threaten them with the police when we are notified; but the police don’t have the resources to charge them. There are just too many lawbreakers and not enough resources.”
He goes on to say that while FSCO does have a list of some of these fraudsters on their website, they use strategies that make them very difficult to find, let alone charge with wrongdoing.
“A lot of them use prepaid phones. We’ll never know who they are,” says Persaud. “When we call their number, they simply disappear. They are brutal.”
So, protection has fallen to the consumer and FSCO tells you what to look for.
First, know that under the Ontario Mortgage Brokerages, Lenders, and Administrators Act, all mortgage brokers and agents must prominently display the name under which they are licensed, as well as their licensing number on any marketing materials, or PR resources, such as advertisements.
Also, any person who is interested in loaning money for private mortgages are never allowed to advertise. Instead, they must go through a mortgage broker who will do their advertising for them.
In addition to knowing just what to look for, Persaud also gives instructions on what you should do if you come across one of these fraudster’s ads. He says that you should take a photo of the ad and send it to FSCO at: contactcentre@fsco.gov.on.ca. Also include in the email, he says, the location of the ad where you saw it, as well as the time and date that it was seen. He also says to be very clear that the ad was posted after 2008.
“Don’t take the ads down, because then we don’t have the evidence anymore,” he says. “And when you take the photo, hold the newspaper up beside it. We need a date to show that it is recent and after 2008 – the year that section of the Act came into effect.”
But of course, it’s not just consumers getting the short end of the stick here – legitimate and licensed mortgage brokers are too.
“It’s frustrating enough for brokers who work hard on a deal and have someone or a local branch swoop in and take a client on half a percentage point in rate than to have to deal with these illegal guys too,” says Persaud. “There are a lot of guys doing it and making huge money.”
