How to protect yourself from loan scams

Someone offers to help you get a loan. They say they know the lender and can take care of the application for you. They ask for your identification, banking information or school documents.

Another person calls from a number that looks familiar and asks you to make a payment.

Both requests may appear legitimate. But before sharing information, sending money or letting someone handle your application, verify who is contacting you. 

It may be harder to recognize an unusual request, especially if you are unfamiliar with how lenders work in Canada. Someone may use that uncertainty to put your personal information, money or loan application at risk.

Be careful with anyone who promises approval

If a third party, such as an adviser, consultant or accountant, says they can guarantee a loan or get your application approved, contact the lender directly before sharing any personal information.

Never allow someone to change or alter your documents. Knowingly submitting false or inaccurate information may be considered fraud.

Blake Gallacher, loan portfolio manager at Windmill Microlending, said, “Our team at Windmill Microlending has encountered loan applications where the dates on school documents had been changed after a third party became involved.” 

False information could lead to an application being declined. If the loan has already been issued, the borrower may be required to repay it immediately. A fraudulent application may also be reported to a credit bureau, making it harder to qualify for credit in the future.

A familiar phone number may be fake

Scammers can change the name or phone number shown on your screen. This is called caller ID spoofing. A call may appear to come from a real lender when it does not.

Emails and websites can also look authentic. The difference may be as small as one extra letter, number or period in the URL.

If you are unsure whether a call or message came from the lender, end the conversation. Find the lender’s official website yourself and call the number listed there. Do not use the phone number or link provided in the suspicious message.

Gallacher wants clients to feel comfortable taking that step.

“I would never be offended if a client said, ‘I’m suspicious of this call, so I’m going to hang up and call you back.’”

Question unexpected requests

Applying for a loan requires personal and financial information. That does not mean you should provide it every time someone asks.

Be cautious if someone:

• asks for information you already gave the lender
• requests a payment you were not expecting
• pressures you to act immediately
• asks for passwords or security codes
• wants personal documents through social media or a messaging app
• tells you not to contact the lender and insists that you work with them directly

There may be a valid reason for a lender to request updated or additional information. The representative should be able to explain why it is needed and provide a secure way to send it.

Use a secure channel

Lenders may send legitimate email or text message reminders about payments or outstanding documents. Use the lender’s application system or client portal to upload personal documents.

If a message seems unusual or you are unsure it came from the lender, do not click the link in the message. Visit the lender’s official website yourself or contact the lender directly.

Before making a payment, confirm that the method and recipient match the instructions on the lender’s website or in your loan agreement.

If you have already shared information or sent money, contact the lender and your bank immediately. You can also report suspected fraud to the Canadian Anti-Fraud Centre.

‍How Windmill Microlending clients can make payments

Regular Windmill loan payments are automatically withdrawn from the client’s bank account.

For an additional, missed or lump-sum payment, clients can:

• make a payment through the Windmill client portal
• add Windmill Microlending as a bill payee through online banking and use their Windmill loan number as the account number
• contact the Loan Management team before paying at a bank branch

Windmill does not accept loan payments by credit card or e-transfer. We also do not request payments through social media.

If you are unsure, contact our Loan Management team at loanmanagement@windmillmicrolending.org before sending any money.