The Financial and Consumer Services Commission (FCNB) has heard concerns from the New Brunswick Real Estate Association (NBREA) about consumers with complaints regarding Rent-To-Own arrangements for the purchase of a home. FCNB encourages New Brunswickers to learn about and follow best practices when they are considering a rent-to-own arrangement for a home purchase.
A rent-to-own arrangement involves two agreements: a lease agreement and an option to purchase. The lease agreement in most respects is a typical landlord-tenant agreement to rent the home at an agreed-upon price for an agreed-upon term. The option to purchase agreement gives the renter the right to purchase the property from the landlord and requires the landlord to sell the property to the renter, if they exercise the option within an agreed-upon time frame. The sales price may be determined at the time they enter the agreement or when the tenant exercises the option, based on the market value of the property at the time. During the term of the lease, the renter may agree to pay a higher rental rate so that the extra funds may be allocated to reducing the final sales price for the home. In some cases, this lowered sales price allows renters to qualify for a traditional mortgage with a financial institution.
FCNB encourages New Brunswickers to use the following best practices when considering a rent-to-own arrangement:
Understand the agreement you are being asked to sign. Always read the agreement you are signing, be sure you fully understand what you are committing to. For example, ask whether you are responsible for maintaining the home or paying property taxes. What happens if the roof needs to be replaced or another major repair is required? Always have your lawyer review the agreement before you sign.
Speak with a financial institution to determine whether you currently qualify for a mortgage, and if so, how much money you are qualified to borrow. This can help you determine whether the mortgage you qualify for will be sufficient to cover the eventual price of the home after the rent-to-own period is over.
Treat the lease agreement like you would a home purchase. Keep in mind that when the rent-to-own period is over, and you still cannot afford to buy the home or decide not to buy it for other reasons, depending on the terms of your contract, you may lose the extra money you paid with each rental payment to lower the sales price of the home. Know whether any extra payments are refundable if you don’t exercise the option.
Study the local real estate market for the area where your home is located. Are housing prices rising or decreasing in value each year? Are they staying the same? Is the sales price your landlord is requesting realistic for the market? It’s important to understand that if the home you’re renting to own loses value during the rental period, you will still be required to pay the final sales price that you negotiated with your landlord.
Consumers are urged to ask questions, to not act under pressure, to do research and to read all agreements when they’re considering a rent-to-own arrangement. When a deal sounds too good to be true, it very well could be.
The real estate industry is co-regulated in New Brunswick by FCNB and the NBREA. Consumers who have concerns about a real estate agent or salesperson should contact FCNB and the NBREA.
The Financial and Consumer Services Commission (FCNB) encourages New Brunswickers to use the following best practices when interacting with door-to-door salespeople:
Always read the contract you are signing and be sure you fully understand it before you commit to a purchase.
Take the time to consider the offer and shop around when purchasing goods that require a home installation. If you decide to cancel once the installation is complete, you may have to pay for the install and uninstall for the product, which could be costly and may leave your home needing repairs.
Ask about and compare cash price, credit price, warranties and service.
Only agree to payments that you can afford, and make sure you understand the full costs including any interest or fees.
If you decide to go ahead with the purchase, ensure you are given a copy of the contract, which contains a statement of cancellation advising you of your right to cancel the contract within 10 days. If a you are not provided with a copy of the contract, you are entitled to extended cancellation rights for up to one year.
Have the salesperson sign the contract before you do. You should be the last one to sign the contract and only after you have read all the details, checked that the contract details are correct (such as date and price), and you understand the content of the contract.
Consumers are urged to ask questions, to not act under pressure, to do research and to read all contracts when approached to purchase products or services from a door-to-door salesperson. When a deal sounds too good to be true, it very well could be.
Consumers who have concerns about a door-to-door salesperson should contact FCNB.
The Financial and Consumer Services Commission (FCNB) is warning New Brunswickers about investing in USI-TECH Limited (USI).
FCNB recently became aware the company has been contacting New Brunswickers through online classified sites. USI is not registered to trade in, or advise on, securities or exchange contracts in New Brunswick. It is, therefore, illegal for USI to trade in, or advise on, securities or exchange contracts in our province.
This company claims to be an online FOREX (foreign exchange) and Bitcoin trading platform provider, located in Dubai, United Arab Emirates.
USI claims to use automated trading software that allows smaller investors to trade in FOREX and Bitcoin. It also advertises high rates of return and promises a pyramid-like compensation structure to get people to recruit family and friends to invest.
Bitcoin and cryptocurrency trading are receiving a lot of attention lately and are being aggressively hyped in social media and other channels. Consumers should be very cautious about getting involved in these products. Cryptocurrencies are volatile and highly risky.
Consumers are urged not to give into the “Fear of Missing Out” and should do their research and understand what they are getting into before investing. Anyone investing in cryptocurrencies should be aware that they could lose all of their investment.
Anybody who has been approached or targeted to invest in USI is asked to contact the FCNB toll-free at 1-866-933-2222, or through its website at fcnb.ca. Becoming an informed investor is the best way to protect your money. Informed investors don’t leave it to chance. They understand the risks and costs involved with each of their investments.
As the holiday season approaches, the Financial and Consumer Services Commission (FCNB) is warning consumers about gifting circles.
Gifting circles, even those marketed as charitable ventures, are pyramid schemes. Participating in a pyramid scheme is illegal, regardless of whether or not a person makes money.
Gifting circles are comprised of 15 people divided into four levels: one at the top, two on the second level, four on the third, and eight on the bottom. The majority of gifting circles target women.
Members in the top three levels of a gifting circle do not have to pay to join. Funding comes from members at the bottom level who must pay a membership fee or “give a gift” to join. Once the bottom level has been filled, the woman at the top is “celebrated.” She collects funds paid by the bottom level and, in exchange, gives them each a small gift, usually a gift card. There is typically a huge difference between the values of the small gift and the one received by the person at the top.
After the top level member leaves, the group splits in two and the members at the second level move to the top. Eight new members must then be recruited to each group for the new top members to get their payout. This cycle continues until there are no more recruits to bring into the group, and it eventually falls apart.
Recruits are told that they will be helping other women with their contribution, and that they are joining a group that will help them when their turn comes. The chance of making it to the top of the pyramid and getting a payout are slim at best; you are more likely to lose all of the money you contributed. Consumers are encouraged to be on the lookout for the warning signs of a pyramid scheme:
Earnings are based on how many people you can recruit, rather than through the sale of products or services.
Pyramid schemes promise to make you rich or return your payout with little effort or risk.
You are asked to contribute large quantities of money or purchase large quantities of products upfront to get the circle “started.”
The training and promotional material focuses on convincing you that the opportunity is not a scam.
New Brunswickers are encouraged to consider these warning signs and do their own research, no matter where the opportunity comes from. Pyramid schemes often have an element of affinity fraud. They rely on the trust you put in your friends and family with the hope that you will hand over your money before taking the time to ask questions or think critically about the opportunity.
New Brunswickers are also encouraged to seek out reputable charitable avenues if they wish to help women in their community. Before donating time or money to a charity, check the Canada Revenue Agency’s Charities Listing to be sure the charity is registered. And if an investment opportunity comes your way, make sure the person you are working with is registered with FCNB.
New Brunswickers who are uncertain about the legitimacy of an opportunity or wish to report a pyramid scheme can contact FCNB online, by email or over the phone at 1 866 933-2222.
The Financial and Consumer Services Commission (FCNB) is issuing this notice to warn consumers about the sale of cars and boats that have been damaged by floods.
It is estimated that 650,000 vehicles were flooded following Hurricane Harvey in Texas and Hurricane Irma in Florida. Water causes extensive damage to a vehicle and it is expected that many of these water damaged vehicles will be disposed of by insurers so they cannot be resold. However, water-damaged vehicles are often moved far from their original location following a large storm, and sold to unsuspecting drivers. Some of these vehicles may make their way into Canada, or be purchased by Canadians looking for vehicles south of the border.
Water damage goes far beyond rust. It can impact important mechanical and electronic systems (including airbag controllers) and cause corrosion. A car that has been flooded may appear to be in perfect condition, but could start having problems in the future, as water damage may take a long time to appear.
To avoid purchasing a vehicle that has been damaged by flooding, New Brunswickers are advised to:
Purchase from a reputable registered dealership as they have an obligation to disclose if a car has sustained water damage. To know if a dealership is registered, you can ask to see their Motor Vehicle Dealer Licence.
Use extra caution when buying through private sale. Private sellers have no obligation to disclose if a car has sustained water damage.
Use a service like CARPROOF or CARFAX, to see the vehicle’s history, including damage records. Avoid purchasing one that came from a flooded area.
Beware of vehicles being sold below market value. If a deal looks too good to be true, it probably is.
Bring the vehicle to a trusted mechanic to have them inspect the vehicle before you purchase it.
Common indicators of a flood-damaged vehicle may include:
Interior and Exterior of the vehicle
A musty odor in the interior, which can sometimes be covered with a strong air-freshener or shampoo. If there is a strong scent of air or fabric freshener make sure it is not masking a more serious scent.
Upholstery or carpeting which is mismatched, loose, new, or stained.
Damp carpets. If you can, try lifting the carpet to check for damp padding under the carpet.
Moisture, sitting water, or debris in the trunk or spare tire area.
Rust around doors, inside the hood and trunk latches, pedals, on unfinished metal surfaces (like the springs and bolts under the seats), or under the dashboard.
Bubbling of paint in areas that are not exposed to weather.
Mud or silt in the glove compartment or under seats.
Brittle wires under the dashboard.
Fog or moisture beads in the interior or exterior lights or instrument panel.
Seat mounting screws that have been tampered with in an effort to dry the carpets.
Under the hood
Water lines in the engine compartment.
Silt and sand in nooks and crannies.
Check the oil – even a small amount of water in the oil will make it murky.
Check the air filter – if there are water stains on the paper filter walk away.
It is important to ask questions and be informed when buying a vehicle from a private seller or a dealership. With all the options and details to consider, you may be excited and overwhelmed at the same time. For more information on purchasing a vehicle, consult Buying a Vehicle on the FCNB website.
Consumers and businesses should be cautious if organizations or businesses that they do not know ask to invest in them or provide personal information. The Financial and Consumer Services Commission (FCNB) issued this alert following a series of incidents reported recently throughout the province.
“A pyramid network described as a ‘pay it forward cloud’ targeting women mainly in northern New Brunswick, a telephone scam targeting Syrian newcomers in Saint John and a phishing scam targeting small business owners in western New Brunswick have all come to our attention in recent weeks,” said Rick Hancox, CEO of the Commission. “Putting money into unregistered investments can be risky. Providing banking information over the telephone is ill-advised and may expose the provider to significant identity theft risks.”
The scheme prevalent in northern New Brunswick leads participants to believe a gifting club will generate a return of up to 800 per cent and help other women. Potential members have been asked to make an investment ranging from $1,250 for a return of $10,000, to $625 for a return of $5,000, with the requirement that each member recruit two other people.
However, as with all pyramid-based scams, it is doomed to fail before all members can recoup their investment: the number of recruits must constantly increase to prevent the collapse of the scheme.
In Saint John, a family of Syrian refugees was contacted by someone seeking money and banking information in exchange for English lessons. The family lost about $400 after falling prey to this telephone scam. The family’s interpreter called the bank and the Saint John police, but the money had already been taken from their account.
In western New Brunswick, a photography business was contacted by a woman claiming to be hearing impaired so she could only communicate via text. She wanted to buy services for a wedding and insisted the business charge an additional amount to a credit card for a wedding planner who, according to her, was unable to accept the credit card directly.
Another small business was asked to provide interior design services worth almost $4,000, with a down payment of $1,000, to be sent to a second person who would provide a key to enter the house needing the design work, after which the balance would be paid. The calls came from Baltimore, Maryland, as well as from Texas.
“The RCMP was made aware of the shady telephone calls to businesses in western New Brunswick, but no formal complaints were made, and, fortunately no one was defrauded,” said Cpl. Chantal Roger, with New Brunswick’s RCMP Financial Crime Unit. “Fraudsters continue to become more sophisticated. We have been made aware of several businesses in New Brunswick being targeted specifically. The fraudster is usually contacting them from outside of Canada and wants to pay up front through a credit card for the company’s services but then looks for bank account information to complete the transaction. These are all warning signs.”
The Financial and Consumer Services Commission has the mandate to protect consumers and enhance public confidence in the financial and consumer marketplace through the provision of regulatory and educational services. It is responsible for the administration and enforcement of provincial legislation that regulates the following sectors: securities, insurance, pensions, credit unions, caisses populaires, trust and loan companies, co-operatives, and a range of other consumer legislation. It is an independent Crown corporation funded by the regulatory fees and assessments paid by the regulated sectors. Educational tools and resources are available online.
The Financial and Consumer Services Commission (FCNB) has revoked Dean E. Fletcher’s licence to sell insurance or operate in the industry.
At a recent hearing it was revealed that, on a number of occasions, Mr. Fletcher failed to obtain insurance for clients who believed that insurance was in place. He is the owner of Harvey Insurance Ltd., and has been a licensed insurance broker since 1988.
The hearing resulted after a complaint was received in March. After examining the documents and hearing evidence, the Acting Superintendent determined that Fletcher’s actions and conduct raised into question his competency and trustworthiness to transact business as an insurance broker. Evidence showed that Mr. Fletcher had:
failed to obtain insurance policies for clients who were led to believe, or who reasonably assumed that policies were in place;
accepted payment of premiums for non-existent policies;
directed payment of premiums other than to Harvey’s proper trust account;
failed to pay over insurance premiums to the insurer; and
failed to maintain proper records.
Staff also determined that Mr. Fletcher had a prior history of regulatory infractions for similar conduct in 2006. This earlier conduct resulted in Mr. Fletcher being placed under supervision with terms and conditions on his licence.
“We have the mandate to help protect consumers through the provision of regulatory and educational services,” said Jake van der Laan, Director of Enforcement of FCNB. “FCNB has a responsibility to see that the public interest is protected and that consumers have confidence that the industry operates properly, fairly and with integrity. Those working in the industry need to have the confidence that the industry is properly regulated and that those operating in the industry are competent to do so. Therefore a revocation of Mr. Fletcher’s licence, while a severe sanction, was warranted.”
FCNB is advising clients of Fletcher and Harvey Insurance Ltd. to contact their insurance company directly and confirm that all desired coverages are actually in place. Full details of the decision and order are available online.
Any person who carries on the business of an insurance agent, broker, adjuster or damage appraiser in New Brunswick, whether or not the person is a resident of the province, must have a valid licence under the Insurance Act of New Brunswick. This applies to all insurance business, whether it is done in person, in writing, over the telephone or online. Consumers are encouraged to Search the Commission’s Database before purchasing an insurance contract, and if there are any concerns to contact FCNB via their website, or at 1 866 933 2222.
The Financial and Consumer Services Commission (FCNB) issued the following advisory today to help consumers avoid financial losses or disputes when making major purchases. “We want consumers to have the information they need to make informed choices and feel empowered to make the right financial decisions,” said Marissa Rignanesi, senior education co-ordinator for the FCNB. Before making a major purchase, consumers are advised to:
Research the company: Check the reputation of the company with friends, relatives, neighbours, and by checking with the Better Business Bureau to see if there have been any complaints filed against the business.
Ask before making a deposit: If required to pre-pay for a product or service, ask what the options are for cancelling the order. Businesses are not required to give back any deposit, so make small ones.
Get it in writing: Get any promises made by a seller in writing. It is easier to prove what was said in case there is a dispute.
Check the return policy: Unless stated in their policy, a seller does not have to give a refund or exchange a product if the consumer changed their mind about the purchase.
Business closures Unfortunately consumers may find themselves in the situation where they have pre-paid for something and the business closes. Or they could be left with warranty issues or unused gift cards.
Visit the location: Stop by the closed business to see if a notice has been posted, giving any further contact information. If the business has declared bankruptcy, then contact the Superintendent of Bankruptcy and if possible register as an unsecured creditor.
Find out your options for cancelling payment: If you paid by credit card, contact the credit card company to see if the charges can be reversed due to the goods and services not being received. If a purchase was paid by other means (such as cheque), check with your bank to see about options for cancelling payment.
“When a business closes, you may be left confused and wondering where to turn, but you are not alone,” said Rignanesi. “While we may not be able to get your money back when it comes to closures, we can provide you with information about where to turn for help.” For more smart buying tips or for questions about the rules around refunds, returns, exchanges or gift cards, visit theFCNB’s website. The Financial and Consumer Services Commission (FCNB) regulates, educates and protects consumers and investors from unfair, improper or fraudulent practices. It brings together regulatory authorities for securities, insurance, pensions, consumer affairs, co-operatives, credit unions, caisses populaires, and loan and trust companies. It is an arm's-length Crown Corporation self-funded by the fees and assessments paid by the regulated sectors. 26-05-14
It is important to ask questions and be informed when buying a vehicle from an automobile dealership. With all the options and details to consider; you may be excited and overwhelmed at the same time. A new insurance product called GAP insurance may be offered to you when finalizing your purchase.
The Financial and Consumer Services Commission of New Brunswick (FCNB) is issuing this notice to inform consumers about the sale of GAP products at automobile dealerships.
GAP products are intended to do just what the name implies – fill a gap. This product covers the difference between the loan amount, financing or lease value on the vehicle and the actual cash value offered if it is in an accident that causes irreparable damage (such as when the vehicle is written-off). It’s meant to cover the gap between the amount you will be paid by your auto insurance company and the amount you owe for the vehicle.
Features of GAP products can vary slightly from company to company and it’s important to consider your insurance requirements as part of your vehicle purchase decision. To help you determine if GAP is a product for you, the FCNB has outlined questions to ask yourself, your insurance company and the dealership.
Is the salesperson licensed to sell this type of insurance? In New Brunswick, all auto insurance products, including GAP products, can only be sold by licensed individuals. The car salesperson at the dealership may provide you with the marketing material. However, they must refer you to the licensed insurance agent to finalize the purchase of the GAP product and the licensed insurance agent should answer any questions you have. You can verify that the person selling you GAP product is licensed on the FCNB website www.fcnb.ca/GAP.
Do you understand what it is that you are buying? Before signing any documents, make sure you understand the GAP product you’re buying, what it covers and if there are any restrictions. Read through the policy completely, and only sign if you are comfortable with the payments and the amount of insurance coverage the policy provides.
Do you have the full cost in writing? After making the decision to purchase a car, with any additional features you may request, consumers are typically provided with one final cost. Review the document that outlines what you’re paying for each item and how much additional the GAP insurance will cost you.
Add-on products, like additional warranties and rust protection can quickly drive up the total price of your vehicle. What may be promoted as only a few dollars more per payment that can quickly add up to hundreds of dollars over the life of your payments. Calculate the total amount of money you pay for these add-ons not just the “per-payment” amount. Only you can determine if you can afford the additional coverage and if the price is worth it.
Are you already covered? Consumers who are being offered GAP products may already have similar coverage under their current auto insurance policy. If you aren’t sure contact your auto insurance company to determine if you are duplicating coverage.
Your auto insurance company may also offer a similar product. It never hurts to shop around for a better price.
How do you make a claim? Asking this question before you buy can help alleviate some of the stress if you are involved in an accident. Do you have to contact your auto insurance company first, or the company that sold you the GAP product? You should also make your auto insurance company aware of the process to be sure you are all on the same page.
The Financial and Consumer Services Commission regulates the financial markets in New Brunswick and has the mandate to protect consumers and enhance public confidence in the financial and consumer marketplaces through the provision of regulatory and educational services. FCNB – Empowering you to make the right financial decisions.
For more information about purchasing a vehicle or insurance products, please visit our website: www.fcnb.ca.
A secret shopper scam is targeting New Brunswickers, the Financial and Consumer Services Commission is warning.
Recently, a 13-year-old Minto girl received a cheque by mail for $3,900 and was informed she had qualified as a secret shopper. Her parents called the police; shared the story and pictures of the cheque and letter on social media; and reported the incident to the Commission.
“I was shocked at first and thought that this was too good to be true,” said her mother. “Fortunately, we knew not to cash the cheque, but I could not help but think that people could easily get themselves into serious financial trouble if they did.”
Variations of the scam have been making their way across the country in recent months. The Commission is spreading the word about this and other similar ones to protect New Brunswickers. At least three other residents have reportedly been approached.
“Scams take all sorts of shapes and sizes and can change slightly from one to the next,” said Rick Hancox, Chief Executive Officer of the Commission. “What stays the same is that the offer comes out of the blue, and they want your money up front. Do not send money or provide personal information or credit card numbers to people or companies you don’t know, especially over the telephone or the internet.”
The scheme starts when an individual receives a cheque from a company and a letter asking to spend some of the money at a certain store. The company asks for a certified cheque or a money transfer in return and advises the individual that they can keep the rest of the money as compensation.
While the cheque appears authentic, by the time the victim finds out the cheque is not real (it can take up to a week for the bank to determine if a cheque is counterfeit), it is too late. The person is out potentially hundreds or thousands of dollars.
Said Hancox: “Ask yourself: Why would a company mail money to me? How would it know that I’m not just going to keep the money for myself? Think critically about offers that are almost unbelievable. Protect yourself and your loved ones from losing hard-earned money.”
Hearing from New Brunswickers about suspicious financial and investment activity early is integral to combatting fraud and the harm it can do. Please contact the Commission at 1 866 933-2222 (toll-free) to get further information, to make a complaint or to express other related concerns.
The Financial and Consumer Services Commission provides protection to consumers and investors from unfair, improper or fraudulent practices. The Provincial government established the Commission on 1 July 2013.
The Financial and Consumer Services Commission brings together regulatory authorities for securities, insurance, pensions, consumer affairs, co-operatives, credit unions, caisses populaires, and loan and trust companies. It is an arm’s-length Crown Corporation self-funded by the fees and assessments paid by the regulated sectors.