On its website, LendCare says it helps customers afford some of life’s big or unexpected expenses.
“Whether it’s buying braces for your child’s teeth, having emergency auto repairs done or getting your pet potentially lifesaving medication, LendCare has your back,” the Pickering-based lender says.
That pitch comes as Canadians, pinched by higher prices and rising unemployment, are turning to loans to supplement their incomes and pay for everything from beauty products to used cars.
But as more consumers take on high-cost loans — with interest rates sometimes above 30 per cent — a Star investigation has found that LendCare is working with unscrupulous businesses across the country that prey on vulnerable borrowers through scams and other exploitative contracts.
In more than 70 lawsuits filed since 2017 from Vancouver to Saint John, customers alleged that merchants using LendCare financing saddled them with crushing debt by engaging in deception, selling defective products, or both. Borrowers also filed scores of complaints to consumer protection officials in multiple provinces.
While most lawsuits are ongoing or didn’t make it to trial, Quebec courts ruled in 10 cases that LendCare’s merchant partners were liable for a variety of bad deals on home appliances and vehicles. LendCare was also found liable in five cases. Courts found serious problems with merchants’ conduct; in one Montreal case, a judge said that a business offering LendCare financing operated a pyramid scheme.
Government officials have also taken issue with LendCare and its partners. Alberta’s Director of Fair Trading ordered the lender in August “to cease engaging in business activities that deceive and mislead consumers” on changes to their payment schedules and cancellation rights, among other requirements. It imposed a $1,500 fine.
In Ontario, where the majority of lawsuits the Star found were filed, officials have for years contemplated more stringent regulation of alternative financial service providers such as LendCare. Doug Ford’s Progressive Conservative government has yet to implement them.
Holly Unruh, a spokesperson for LendCare’s parent company Goeasy, said that “any suggestion that LendCare has been helping prey on vulnerable borrowers with scams or exploitative contracts is untrue and unfounded.” She declined to address specific cases.
She said that LendCare is “committed to responsible lending” with clear and transparent financing agreements, rigorously vets potential merchant partners, and takes action when customer concerns arise. Unruh said in October that LendCare terminated more than 40 merchant partnerships over the previous six months “when standards were not met.”
“With hundreds of thousands of active customer relationships, we know operational issues can occur, and we take them seriously,” Unruh added. “We know there’s always more to do.”
One former customer is Patricia Binder, who lives in Ottawa. Hers is one of 20 court cases where Ontario seniors alleged they were scammed by sellers of attic insulation, water filters, air purifiers and other home equipment financed by LendCare.
In 2024, Binder sued several businesses involved in the schemes and settled with LendCare, but the experience had a lasting impact on her. “I don’t even answer the door anymore,” she told a Star reporter from a window on the second floor of her home. “There are too many people out there looking to take advantage of the elderly.”
Defective goods and shoddy services, customers allege
LendCare offers point-of-sale financing, meaning that when a customer buys a merchant’s product, they enter a credit agreement. The lender pays the seller with the borrowed amount and the customer then repays the loan, plus interest and fees, to LendCare over months or years.
In July, the Star found that a group of Ontario cosmetics stores faced accusations of pressuring and tricking people into signing up for high-cost LendCare loans they did not understand. In some cases, customers alleged, their signatures were forged on contracts.
Subsequent reporting uncovered 67 lawsuits filed in Ontario, Quebec, British Columbia, Alberta, Nova Scotia and New Brunswick where customers alleged that they were stuck with LendCare loans after entering misleading or fraudulent agreements. In 11 of these lawsuits, customers said their signatures or initials were forged on contracts.
In 34 lawsuits, customers alleged that merchants sold them defective goods or poor-quality services financed through LendCare. After their car broke down or expensive tutoring for their kids didn’t deliver and they sought to cancel the deal, it was too late, LendCare told them, and they still had to pay.
In nearly all cases where a LendCare defence was recorded, the lender denied responsibility for or knowledge of their merchant partners’ business practices and insisted on the validity of its credit agreements.
But courts rejected this rationale in four cases – three in Quebec and one in Nova Scotia. In that case, LendCare was the plaintiff against a borrower who had repeatedly tried to cancel a deceptive contract. The judge dismissed the lender’s claim.
The Star was unable to confirm the outcome of a handful of lawsuits, but 31 appeared to be ongoing when court records were compiled over the past few months. Another 25 cases were settled, discontinued, or dismissed for delay.
Ottawa senior saddled with $17,000 loan
When workers showed up at Binder’s home in 2018 to install a thermostat and smoke detectors, they said it was “part of the contract,” her lawsuit says. She understood this as a reference to a HEPA filter she had previously bought after an aggressive sales representative for a company called Ecolife Home Comfort came to her door.
Four years later, Binder received a “Letter of Confirmation and Credit Agreement” claiming that LendCare financed the purchase and installation of Ecolife products, some of which she said were never installed. Binder, who was 86 when she filed her lawsuit last year, did not remember signing, or even seeing, that contract. LendCare’s letter said she had committed to pay the lender more than $17,000 through 60 monthly installments.
Then, Binder’s son discovered five notices of security interest (NOSIs) against his mother’s home, including one registered by LendCare for the Ecolife devices, the lawsuit alleges.
A NOSI is a financial tool similar to a lien that is meant to warn potential buyers of the property that an air conditioner, furnace or some other piece of equipment is subject to a security interest from the lender who financed its purchase. Ontario officials were so concerned about the misuse of NOSIs in schemes to defraud seniors that the Ford government banned their use for consumer goods last year.
Binder had already paid LendCare more than $10,000 when she stopped payments and told the lender its contract was void. There was no statement of defence from LendCare or Ecolife in the court files obtained by the Star. Ecolife was dissolved in 2022 and did not respond to the Star’s request for comment.
Binder declined to further comment on her lawsuit. Her lawyer, Jennifer Lillie, said they were able to reach “a fairly good settlement” with LendCare.
Vittorio and Ascenza Palmieri, 82 and 78, fell victim to several similar schemes, including one involving LendCare financing attic insulation, according to a lawsuit filed in September. They alleged that a salesperson visited their North York home in 2019, promising energy savings and a government rebate that never materialized to recoup the hidden costs of the contract, which amounted to more than $7,000. LendCare has not yet filed a defence in that case.
John Baldassarra, a principal broker at lender Money Mart and former broker for EasyFinancial, another Goeasy subsidiary, said providers of conditional sales contracts – sales that depend on the repayment of loans – should have processes in place to vet merchants.
“You have to make sure it’s a legitimate corporation … We also have to make sure they have the proper insurances in place, there are no regulatory issues or any customer complaints,” he said, speaking generally and not about LendCare’s specific vetting process.
Unruh said LendCare conducts due diligence on merchants’ ownership, operations and reputation before partnering up. The lender then monitors merchants “under a robust compliance framework that includes early loan activity reviews and ongoing audits,” she said. LendCare, however, is “not involved in the manufacturing, sale, or delivery of” their products.
As for the alleged instances of forgery, Unruh said the lender has “strict identity verification and signature validation processes to prevent fraud.”
When concerns arise, LendCare may review, suspend or terminate a merchant relationship, she said. Unruh declined to identify the more than 40 merchants with which LendCare recently cut ties.
Quebec officials crack down on law-breaking merchant
Quebec’s consumer protection watchdog, the Office de la protection du consommateur (OPC),
recently cracked down on a door-to-door seller offering LendCare financing after fielding several complaints about its business with the lender.
Systèmes Rainbow operated a multi-level marketing scheme, which is illegal in the province. Sales representatives convinced clients to purchase vacuum cleaners on the promise of steep discounts if they made sales in return – a promise that often never materialized, according to court records.
Montreal resident Mackendy Chery said the Rainbow representative who knocked on his door never told him that he was applying for a loan. He sued and, in March, the court ordered a refund and the contracts’ cancellation. Chery, however, shared a bank statement screenshot with the Star showing that LendCare continues to take money from his account.
Last year, Quebec outlawed financing agreements concluded during door-to-door sales. In April, the OPC found that Rainbow nonetheless continued to offer financing during such sales and made false representations to customers, among other infractions to consumer protection legislation.
The OPC revoked the firm’s vendor license because it could not guarantee “the honest and competent conduct of its business activities.” Rainbow did not respond to the Star’s request for comment.
This was not the first time Quebec punished a LendCare partner. In 2020, a tribunal found that a heating systems company using LendCare financing could not conduct its “business competently and honestly,” and revoked its contractor’s license at the request of an industry regulator.
Concerns over LendCare’s business in the province endure. Option consommateurs, a consumer advocacy group, filed a complaint with the OPC in September against the lender, alleging numerous infractions including unauthorized payments, hidden fees and falsified contracts.
Option said that some contracts featured an interest rate of 37.95 per cent. An annual percentage rate – which includes the interest rate plus other fees charged by lenders – of more than 35 per cent is criminal in Canada.
“Lendcare systematically refuses to comply” with Quebec’s Consumer Protection Act while dealing with “financially vulnerable people,” Option’s general manager, Christian Corbeil, wrote in the complaint. He asked the OPC to investigate.
Unruh denied that LendCare charged customers above the criminal rate. She said the company “makes loans in compliance with all provincial and federal legislation.”
Ontario considered more oversight, but still no action
Despite mounting court cases in LendCare’s home province, it is still unclear to what extent Ontario authorities have stepped in or can intervene to protect customers.
Ontario’s Ministry of Public and Business Service Delivery and Procurement (MPBSDP) said it laid five unspecified charges against LendCare and its directors in 2021, but these were withdrawn after the consumer resolved the issue. The MPBSDP said it has more than 2,000 pages of consumer complaint records regarding LendCare since 2021, but did not share them in time for publication.
MPBSDP spokesperson Joshua Henry said a proactive inspection of LendCare in June “found no violations of the Consumer Protection Act.”
The province previously signalled its intent to better protect borrowers and tighten oversight of high-cost lenders, which consumer rights advocates say are insufficiently regulated in Ontario.
“Evidence suggests that high-cost credit agreements … are growing in popularity and use,” a 2021 Ontario government consultation paper says. Ontarians, “particularly individuals experiencing social, health and economic vulnerabilities,” resort to them, it says, because they can’t access more affordable options from banks.
Consultations focused on whether Ontario should introduce stronger disclosure requirements and a cooling-off period for customers entering such contracts, among other rules.
The Consumers Council of Canada, an advocacy group, said in their submissions at the time that “consumers would be better served if most of the measures being considered by the Ontario government were implemented.”
Yet, while other provinces moved to add legislative safeguards for the industry in the past decade, the Ford government stayed put. Nearly five years after the 2021 consultations, the MPBSDP said that feedback “is still being considered.”
With files from Amy Dempsey Raven.
