#FinancialFridays: Elaborate Scam

We found an informational article from CBC about what they are calling an “elaborate scam” and we decided this should be our Financial Friday this week.

Some seniors are at risk of losing their homes in a scheme involving door-to-door equipment rental contracts, questionable renovations, and mortgages worth hundreds of thousands of dollars that many didn’t know they had and can’t afford, a Marketplace investigation has found.

Lawyers familiar with the situation say there are potentially hundreds of victims throughout Ontario — in what one called an “elaborate scam.”

Each situation is unique, but many seem to follow a general pattern where homeowners — usually seniors — who have previously been tricked into various door-to-door HVAC equipment rental contracts are again approached at their homes by people who say they can help the homeowner consolidate their debt. 

In some cases, the homeowners are told they are eligible to receive money back if they buy more equipment or have renovations done on their homes. In reality, their home is used as collateral and they are allegedly tricked into signing mortgage papers that many say they did not understand. 

Funds from the mortgage are deposited into the homeowners’ bank accounts, then the same door-to-door people allegedly return, asking the homeowner to write cheques or money wires for those funds, telling them it’s to cover the cost of the home renovations. 

The mortgages are usually a one-year term with 25 percent interest and monthly payments paid upfront, which means that in many cases the homeowner does not know they have a mortgage until it comes due a year later. 

It remains unclear who is ultimately responsible for orchestrating the scheme province-wide or if there are multiple parties involved. The Ontario Provincial Police (OPP), through their Serious Fraud Office (SFO) and in collaboration with other police agencies, say they are investigating a similar-sounding scheme, but won’t identify the companies or individuals under investigation.   

In January, the SFO sent a statement to Marketplace, stating that the scheme is “complex and multijurisdictional, involving multiple individual complaints across the province.” 

A number of lending companies are named in lawsuits across Ontario with similar allegations. While not involved in every mortgage Marketplace reviewed, one lender came up consistently in the research — Canada’s Choice Investments (CCI). 

Marketplace found 40 CCI mortgages ranging from $100,000 to $550,000, each with 25 percent interest, registered on properties in Ontario. In some cases, those mortgage loans are split with other private lenders, while at other times they are owned solely by CCI. 

Of those 40 mortgages, Marketplace producers tracked down over half of the homeowners, their family members, or lawsuits filed on their behalf. All said they or their family members had not actively sought a mortgage, and while they don’t know who orchestrated the scheme, many believe CCI is involved.

For more information and stories about how this has affected Ontarians, visit this link: