Ottawa, September 25, 2002 -- Over the past few months, the Office of the Superintendent of Financial Institutions (OSFI) Canada has issued several Warning Notices involving the use of names of legitimate Canadian financial institutions in various "advance fee" scams. Most recently, OSFI has become aware of a scam using the names of government organizations, including those of the Department of Finance, Canada Deposit Insurance Corporation and OSFI. By posing as legitimate financial institutions or government entities, scammers make it more difficult for their victims to know with whom they are dealing.

"Advance fee" scams can take many forms. Currently, the majority appears to involve classified advertisements published in newspapers, mostly in the United States but many in Canada as well. Ads often promise a guaranteed loan, even if someone has a bad credit history or no credit rating at all. They usually request an up-front fee of several hundred dollars. If money is sent, it is unlikely the promised loan will ever materialize, and the advance fee payment is unlikely to be returned.

"Advance fee loans operating for a criminal purpose generate millions of dollars annually in Canada," says Nick Burbidge, Senior Director, Compliance, at OSFI. "Persons with poor credit ratings are usually the key targets and once the 'loan processors' receive the advance, they usually disappear."

Consumers should be aware that classified advertising for loan opportunities does not guarantee the legitimacy of the company. In addition, the public should be careful to verify the name of the institution offering a loan. For example, OSFI publishes a list of all federally regulated financial institutions on its Web site at www.osfi-bsif. gc.ca/eng/whoweregulate.asp. However, because scammers are using the names of legitimate Canadian financial institutions in their advertising, consumers are advised to contact the head office of a particular financial institution to verify the legitimacy of any loan offer. The public can view a copy of the OSFI Special Warning Circular at www.osfi-bsif.gc.ca/eng/publications/notices/index_warning.asp.

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