FSCO takes action against fraudulent lender

FSCO takes action against fraudulent lender

FSCO takes action against fraudulent lender

MortgageBrokerNews.ca, which reported last month that a predatory lender was operating in the Greater Toronto Area, has learned that the Financial Services Commission of Ontario has taken action.

However, Creditstone Lending Service has yet to respond to FSCO’s order that it cease operating its website.

“Please be advised that Creditstone Lending Service is not licensed with FSCO as a Mortgage Brokerage,” read a letter from the government agency to the Ontario Trial Lawyers Association, whose Burlington address Creditstone falsely listed on its website.

“We reached out to the entity to request that the website, creditstonelendingservice.com, be removed, however no response has been received,” continued the letter. “To warn consumers of the unlicensed activity, a Warning Notice was posted on FSCO’s website on February 21, 2019.”

On its website, Creditstone Lending Service bills itself a “nation-wide [sic] financial service provider” that accommodates private loans, including on mortgages. However, a quick phone call to FSCO last month revealed Creditstone Lending Service is not registered. Moreover, the address listed on Creditstone’s website—3344 Mainway Burlington, ON—has belonged to the Ontario Trial Lawyers Association for at least the past two years.

An Ottawa-based mortgage broker named Stephane Prevost contacted MortgageBrokerNews.ca last month when his client had allegedly been swindled by Creditstone. Prevost’s client was due a $10,000 loan from Creditstone but was first told to pay an upfront insurance fee of $890 before any loan documents were even sent.

“If there was a fee to be charged, legally you can’t do that,” said Prevost. “For any loan agreement in Ontario, it’s fraudulent to ask for an advanced fee, even if it’s an insurance fee.”

Prevost’s client paid the fee and was subsequently told to send another one, this time for $990, before any loan would be disbursed.

When MortgageBrokerNews.ca contacted Steven Price, the Creditstone representative whom Prevot’s client dealt with, he denied knowing her, even though a promissory note confirming the two were familiar had already been reviewed. Price subsequently called Prevost’s client to ask if she’d consented to a journalist calling him.

While there were several red flags, Prevost says arguably the biggest is that the insurance fee his client paid was e-transferred directly to Price rather than to the lender.

In addition to contacting FSCO, which took action, the Ontario Trial Lawyers Association reported Creditstone Lending Service to Halton Police, however, the latter has yet to respond.