FSCO frustrated by unlawful advertising

FSCO frustrated by unlawful advertising

FSCO frustrated by unlawful advertising

 

Too many unlicensed brokers and not enough resources has FSCO frustrated with the deluge of public complaints over illegal mortgage brokering advertisements.
 
“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, the senior licensing approvals officer with the Financial Services Commission of Ontario. “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."
 
Under Ontario’s Mortgage Brokerages, Lenders and Administrators Act, all mortgage brokerages, brokers and agents must prominently disclose the name under which they are licensed and their licence number in all public relations materials, including ads. Ads for mortgage brokers and agents must also include the name and licensing information for the brokerage they are affiliated with. 
 
In addition, private lenders for mortgages are prohibited from advertising their services. Only the licensed mortgage brokerage that they do business with can advertise. 
 
FSCO does publish the names of illegal brokers on their website, but Persaud explains that the people posting these bills on street posts are too slippery and too great in number to catch.
 
“A lot of them use prepaid phones. We’ll never know who they are,” he told MortgageBrokerNews.ca. “When we call their number, they simply disappear. They are brutal.”
 
To report an illegal mortgage brokering ad, members of the public can send FSCO a copy or photograph of the ad, along with its location and the date and time they received or viewed it. This information can be sent to contactcentre@fsco.gov.on.ca. 
 
“Don’t take the ads down, because then we don’t have the evidence anymore,” says Persaud. “And when you take the photo, hold a 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.”
 
Consumers who arrange a mortgage from a mortgage brokerage, broker or agent that is not licensed in the province are not protected under the Act, which holds Ontario’s mortgage brokerages, administrators, brokers and agents to specific standards. 
 
Persaud, who worked in the mortgage broker industry, can sympathize with brokers on how much damage these fly-by-night illegals can do.
 
“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.” 
14 Comments
  • Joe the Broker 2013-05-14 8:34:08 AM
    If people dont know enough to stop calling businesses on light posts, they deserve to get screwed...
    Post a reply
  • Ed Novak, Real Estate Broker 2013-05-14 8:48:31 AM
    Considering the fees FSCO charges, plus all the association dues, etc, maybe FSCO should start a public campain and do a bit of their own lampost advertising to educate the public? Wouldn't that make sense?
    Post a reply
  • ON Consumer 2013-05-14 8:49:31 AM
    Even when FSCO knows who the culprits are and has evidence they don't do anything. There are several complaints about a mortgage agent who was licensed through FSCO aiding an unlicensed mortgage agent for close to a year on numerous mortgage applications and FSCO has not taken ANY action 18 months after the complaints were lodged.

    I think Mr. Persaud's time would be better spent investigation those complaints and taking the action required rather than venting on a forum.

    Given the illusion that FSCO takes this serious but takes no action just makes proves what kangaroo court FSCO is.
    Post a reply