The Financial and Consumer Services Commission (FCNB) is reminding New Brunswickers to be mindful of the risks of borrowing from an unlicensed payday lender.
FCNB is launching a campaign to educate consumers on how to ensure a payday lender is licensed with FCNB, the risks of dealing with one that’s not and the importance of reporting unlicensed payday lenders.
“With the increasing cost of living, more consumers may be turning to payday loans to help with day-to-day expenses,” says Alaina Nicholson, director of consumer affairs at FCNB. “When searching for payday lenders online, consumers run the risk of working with unlicensed payday lenders who don’t follow the rules.”
Payday loans are a very expensive way to borrow. New Brunswickers are reminded to carefully consider other options available for short-term borrowing situations and to make sure they understand the cost of borrowing before agreeing to a payday loan.
In New Brunswick, payday lenders must be licensed by FCNB, whether they have a physical location or are only offering loans online. Licensed payday lenders are inspected by FCNB to ensure they comply with consumer protection laws. Working with a payday lender who is not licensed, can put you at risk of intimidating collection practices and aggressive communication methods such as harassing friends, family or employers.
Consumers seeking out credit options should be aware that using the services of a company that isn’t licensed to operate in the province puts them at a greater risk for harm. The risk of finding an unlicensed lender is even greater when searching online. Finding a payday lender through online search or seeing an ad for a payday loan doesn’t guarantee the lender is licensed to operate in New Brunswick.
“FCNB has received consumer complaints that unlicensed payday lenders have contacted them at their place of employment or contacted their employer when they fall behind in their payments, this is against the law,” says Nicholson.
Consumers who have been harassed by payday lenders should report it to FCNB, the Canadian Anti-Fraud Centre, and their local police. Reporting unlicensed payday lending activity lowers the chances of others being affected by unlawful practices and fraud.
Consumers can check if a payday lender is licensed by visiting FCNB.ca. FCNB also has resources on its website and social media channels to educate consumers about the importance of using licensed payday lenders and to help consumers understand their rights and responsibilities when doing so.
Audio files of Alaina Nicholson, director of consumer affairs at FCNB
FCNB has the mandate to provide regulatory services that protect the public interest, enhance public confidence and promote understanding of the regulated sectors through educational programs. It is responsible for the administration and enforcement of provincial legislation regulating mortgage brokers, payday lenders, real estate, securities, insurance, pensions, credit unions, trust and loan companies, cooperatives, and a wide range of other consumer legislation. It is an independent Crown corporation funded by the regulatory fees and assessments paid by the regulated sectors. Online educational tools and resources are available at www.fcnb.ca.