To close the deal on a used Volkswagen Tiguan in late 2022, Denaia Taylor had to turn to a subprime lender.
The Brampton resident “didn’t have the best credit,” she said, so she took on a $13,000-loan from Pickering-based LendCare, at 14.9 per cent interest. With additional fees, she would owe LendCare more than $18,000 over five years.
Later, a LendCare sales representative called to offer a warranty for mechanical repairs. Thinking it could come in handy for an older model car, she bought it.
When her Tiguan was totalled last year after sustaining water damage not covered by the warranty, she contacted the lender to cancel it. That’s when she found out that LendCare had sold her the protection plan as a separate loan, also with an interest rate of 14.9 per cent, bringing its total cost to $3,372.
“I was just under the impression I was getting a warranty,” Taylor said. “I’ve never heard of a warranty offered as a loan.”
It was allegedly a common practice at LendCare to trick unwitting customers into signing up for costly insurance products, a Star investigation has found.
Key details allegedly left out of pitches
Five former LendCare employees told the Star that during their time at the company in the 2020s, staff routinely sold insurance and warranties to borrowers without their consent or knowledge. They said that when sales staff mentioned the insurance products, they often failed to disclose key details such as the interest charged on the payments or even that the coverage was packaged as another high-cost loan. Two of the former staffers said sales representatives would approve loans and then, without telling borrowers, add insurance to their contracts.
Among the former employees, two worked in collections, two worked in customer service and one worked in sales. They either worked alongside staff who sold insurance, handled complaints from customers who said they were misled, or both. One of the former collections staffers was a manager. The Star agreed not to use their names because they fear retaliation from LendCare or other professional repercussions from speaking out.
All five former LendCare staff said customers, surprised to see insurance terms they did not agree to on contracts, regularly complained to the company. They said that management fired some employees responsible for improper insurance sales, but that issues persisted.
Four of the former employees said sales staff were motivated to mislead customers because of the lucrative commissions they earned when selling insurance products.
As loan book grew, a push to sell ‘ancillary’ products
LendCare, a subsidiary of alternative lender Goeasy, offers point-of-sale financing through merchants, making it seamless for Canadians to use high-cost credit to buy used vehicles or pay for their pet’s veterinary care.
As Goeasy’s loan book grew, LendCare pushed the sale of “ancillary products” — add-ons such as credit insurance and warranties. These have been flagged by consumer advocates as a way for lenders to take advantage of vulnerable borrowers.
Goeasy spokesperson Holly Unruh said optional insurance products “play an important role in supporting customers.” She said that allegedly misleading sales are investigated by management. Unruh told the Star in January that since Goeasy acquired LendCare in 2021, the company has “strengthened oversight and controls around ancillary products, including governance, monitoring, training, quality assurance, and audit requirements, with a particular focus in the last 6 months.”
“The allegation that LendCare regularly misleads borrowers to sell ancillary products is not reflective of our policies, training, or controls in place to ensure informed customer consent,” Unruh said. “We take steps to ensure our customers understand what they are purchasing, including: costs, interest, coverage, and eligibility.”
As part of an ongoing investigation, the Star has found that LendCare extended loans through businesses that preyed on vulnerable borrowers across the country, and suppressed its reported delinquency rate at the expense of customers. In previous statements to the Star, Goeasy has denied wrongdoing.
Customers such as Taylor have turned to Google, Trustpilot and the Better Business Bureau to complain about the insurance products they say were sold with false or incomplete information.
Even though Taylor’s insurance coverage expired after 30 months, she would continue to pay it through biweekly installments of $26 for five years. These conditions, detailed in a 16-page contract Taylor only received weeks after the sale, were never mentioned by LendCare’s sales rep, she said.
LendCare refused to cancel the warranty after her car got totalled, she said. She was still paying it as of January.
Unruh did not address questions about specific customer allegations but said that LendCare reviews complaints “with a strong focus on doing right by the customer, including cancellation and refunds where appropriate.”
C-suite sees growth opportunity in insurance sales
A few months after Goeasy acquired LendCare in 2021, then-Goeasy CEO Jason Mullins was asked on a quarterly earnings call about his strategies to increase the “take-up rates on ancillary products” at LendCare.
These include various warranties and credit insurance products that can protect lenders against charge-offs when borrowers lose their jobs or become sick and can no longer make payments on the insured loan.
Mullins said that under another Goeasy brand — Easyfinancial, which also offers high-cost loans — about half “or maybe just over half the customers” opt to purchase one or more ancillary products. At LendCare, “it’s much smaller,” he said. “But it’s also, therefore, an area of growth and opportunity for us.”
A 2022 LendCare “product guide” obtained by the Star describes some of the available ancillary products. They include life, disability, critical illness and unemployment insurance administered by a third party, Reinsurance Management Associates, Inc. (RMA). They also include guaranteed asset protection (GAP) insurance and extended warranties for damaged or stolen vehicles such as used cars, boats and RVs. The guide was still in use as of 2024, according to one of the five former staffers. Goeasy declined to elaborate on LendCare’s offering of ancillary products. An executive for RMA said the firm “is not aware of any misleading sales practices by LendCare’s sales representatives.”
There was intense pressure for LendCare staff to sell high volumes of such products, according to a 2023 wrongful dismissal lawsuit filed by a sixth former employee. David Thibodeau, a former LendCare sales representative, said monthly targets got so high that “more than half of the team failed to meet targets in April and May of 2022, and no employee achieved their targets in June and July of 2022.”
Thibodeau, who sold loan protection plans and insurance, said between February and May of 2022, then-department director Malyka Khawaja changed his team’s targets from $75,000 to $130,000 in sales per month. Thibodeau said he and “other members of his team expressed concerns about increased targets,” but LendCare did not address them.
Goeasy did not answer questions about the case. Khawaja did not answer requests for comment. Thibodeau said he reached a settlement with LendCare and declined to further comment about his case or the company’s business practices.
Loan insurance targets the vulnerable, ACORN says
The unnamed former collections manager who spoke to the Star said they warned LendCare’s leadership team about the sale of insurance without proper consent on several occasions and that other staff regularly raised concerns from customers. They said some staff were fired for faking calls between each other to create a false record of customers agreeing to buy insurance, but that deceptive sales continued.
One former customer service representative said they brought up alleged improper insurance sales to their manager in a meeting, but she was dismissive. “It’s not like the management didn’t know about this, because we would get some callbacks” from disgruntled customers, they said.
The former sales employee said it “took some time” but management fired some employees who misled customers to sell insurance. “However the potential for something like this to happen again is there,” they said.
Two former employees said LendCare also sold insurance products to borrowers who did not qualify for them. The former collections manager said these included vehicle insurance products that could not be extended to altered ATVs but were still sold for such vehicles. The former sales employee said LendCare staff sold disability and critical illness insurance to customers who were actually disqualified because of pre-existing heart conditions.
Unruh, the Goeasy spokesperson, said that “eligibility requirements are built into the process and applied consistently.” She added that “if we identify a case where coverage was offered to someone who did not qualify, the insurance is cancelled and premiums are refunded.”
In a 2022 report, the Association of Community Organizations for Reform Now (ACORN) Canada, an advocacy organization for low- and moderate-income people, described insurance as “a tactic to extract more money from vulnerable people.”
ACORN, which conducted a survey of 113 of their individual members who had recently taken a high-cost loan, found that 15 per cent of respondents said the lender did not ask them about insurance and other optional products, but “they discovered later that it was added to their loan when a large sum got debited from their account for the additional product.” Another 15 per cent reported that the lender “suggested they take the additional product (insurance) but did not explain anything about it.”
LendCare’s efforts to upsell insurance products seems to be paying off.
In another earnings call in early 2025, Hal Khouri, who was then Goeasy’s Chief Financial Officer, said that “approximately half of the overall total portfolio composition has credit insurance,” which would include LendCare, among other Goeasy brands.
This, Khouri said, would protect the lender and its investors in the event of borrowers losing their jobs en masse in an economic downturn.
