The rules and issues around the COVID-19 pandemic continue to evolve and information changes consistently. Please take note of when our content was written and always go to the sources we’ve provided for the most current guidance.

If the pandemic has put you under financial pressure and you’re considering taking out a loan, we have some important information to share with you about advance fee loans. We’re going to tell you what they are and some red flags to watch out for.

Upfront fees on loans are illegal

What if you need a loan but have bad credit? Would you jump at the opportunity if a loan broker offered to secure a loan for you and all you had to do was give them $50 upfront?

Sounds too good to be true, doesn’t it? According to the Canadian Anti-Fraud Centre, it’s actually illegal for a company to request an upfront fee prior to obtaining your loan.

Red flags

Here are some tips from the Financial Consumer Agency of Canada about advance fee loans and some red flags to watch out for:

  • Don’t pay upfront. Legitimate lenders don’t usually ask for advance fees.
  • Don’t fall for promises that you’ll get a loan regardless of your credit problems. If you have poor credit or haven’t established a good credit history yet, it’s unlikely that anyone will lend you money without charging large fees.
  • Be cautious about emails offering to help you get a loan. Many unsolicited emails are scams.

If you have paid for an advance fee loan and suspect that you have been scammed, report your concerns to your local police and the Canadian Anti-Fraud Centre at 1-888-495-8501. We hope this information is useful to you!

Did you like this? You might like these posts too!   

The Canada Emergency Response Benefit: What you need to know 
What else you should know about the Canada Emergency Response Benefit
What to know about BC Hydro’s COVID-19 Relief Fund for residential customers 
COVID-19: how to request a grant under BC Hydro’s Customer Crisis Fund  
How to apply for BC Housing’s BC Temporary Rental Supplement Program  
COVID-19: protecting yourself from scams and fraud

Look through all of our COVID-19 related information on our website.     

Where do we fit in? 

Yes, we are a provincial regulator. We are responsible for some very specific transactions in BC. We aren’t experts on COVID-19. We won’t – and shouldn’t – ever give medical or legal advice. But we are in a unique circumstance right now and we want to help people navigate the current reality. We don’t have all the answers, but we will do our best to share information from reliable sources, put it in ways that are easy to digest and understand, provide referrals and help you navigate this situation.   

About Consumer Protection BC

We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best option. Explore our website at