Mar 9, 2026
In her words, Denaia Taylor told the Toronto Star that she “didn’t have the best credit” (1). So, when it came time to purchase a 2022 Volkswagen Tiguan, the Brampton resident turned to a subprime lender for financial support: LendCare. The Star reported that Taylor took out a $13,000 loan at 14.9% interest.
Later, Taylor received a call from a LendCare sales representative asking if she would like warranty for mechanical repairs on her vehicle. Taylor reasoned that the coverage would be prudent, given the age of the vehicle. Turns out, she signed up for much more than just a warranty policy.
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After Taylor’s vehicle was totalled — an incident not covered under her warranty plan — she called the lender to cancel her warranty. That’s when she found out her warranty plan was sold as a separate loan costing $3,372, including a 14.9% interest rate.
“I was just under the impression I was getting a warranty,” Taylor said. “I’ve never heard of a warranty offered as a loan.”
A disturbing pattern of misleading clients
Taylor was not the only LendCare customer to be unknowingly — and unwillingly — signed up for a loan or other product they were not aware of. In an investigation, the Star talked with five former LendCare employees who alleged that staff of the lender “routinely sold insurance and warranties to borrowers without their consent or knowledge.”
Two of the five former staff members revealed that certain LendCare sales reps approved loans for clients and then added additional insurance to their contracts — without informing the customer.
All five former staff members said they raised the misconduct with management. Some staff were fired, and issues at the company continued on.
Holly Unruh, a spokesperson for LendCare’s parent company, Goeasy, told the Star that the deceptive sales are being investigated by management. “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.” She added, “We take steps to ensure our customers understand what they are purchasing, including: costs, interest, coverage, and eligibility.”
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A concerning practice
Buying a vehicle in Canada can be a complex purchase without taking into account potentially confusing warranty contracts. A quarterly report from Equifax Canada for Q2 2025 found that lenders were tightening their lending criteria, as one in five consumers reported going through multiple review rounds to get financing. That ratio was nearly double prior to the pandemic, the credit reporting agency found (2).
To find financing, some consumers — like Taylor — may turn to subprime lenders for easier access to credit. But in her case, Taylor was allegedly duped into buying a product she wasn’t aware of.
In fact, numerous consumers have faced this issue. A member survey from ACORN, a non-profit representing middle- and low-income Canadians, found that 15% of respondents had an additional product unknowingly added to their loan contract, only finding out “when a large sum got debited from their account for the additional product/insurance (3).”
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These practices raise a critical question: is this legal?
It isn’t unusual for auto dealers to bundle warranty as part of their overall financing contract (4). But it doesn’t appear to be common for warranties to be financed through a separate loan themselves.
Furthermore, federally regulated banks that offer additional loan products such as loan insurance are obligated to provide consumers with detailed information including terms and conditions, how to cancel and information about the charges incurred (5).
While lenders that aren’t federally regulated may not have the same obligations, financial institutions that are members of the Canadian Bankers Association must provide clear, understandable disclosure of their insurance services.
According to Canada’s Competition Bureau, making “false or misleading representations” to a client so they purchase a product is illegal (6).
How you can avoid shady loan practices
Taylor’s experience with a warranty allegedly packaged as a loan may give consumers pause the next time they finance a vehicle. But situations like this aren’t inevitable. Here’s how you can protect yourself from predatory lending practices.
- Know the lender outside the contract. Before signing any agreement, research the lender to see what other customers are saying. If the company has a history of treating customers unfairly, it may not be worth doing business with them.
- Watch for sly practices. Misleading salespeople may present a contract openly but discourage you from reviewing it closely. If you hear phrases like, “don’t worry about this section” or “don’t fret about the details,” don’t sign on the dotted line.
- Read the contract closely. Understanding exactly what you are signing is essential when dealing with auto loans and other financial products. Also, pay attention to minor aesthetic details like page numbers or formatting changes — if something doesn’t look proper, there could be foul play at work.
- Never agree to a contract verbally. While a phone call may be more convenient than a sit down meeting, it rarely works in your favour. Always review a contract in person and never agree to a loan verbally without knowing the terms and conditions.
If fall victim to unfair business practices, report the issue to the Competition Bureau of Canada and your provincial auto sales regulator. In some cases, small claims court may be an option as well.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
Bottom line
As Canadians continue to face rising vehicles prices (7), many will turn to alternative lenders for financing. But without proper due diligence, you could find yourself signing up for a loan you never explicitly agreed to. No matter how urgent the purchase, always read the fine print.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Toronto Star (1); Equifax (2); ACORN (3); Ford (4); FCAC (5); Competition Bureau Canada (6); Automotive News Canada (7)
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Brett Surbey is a corporate paralegal with KMSC Law LLP and freelance writer who has written for Yahoo Finance Canada, Success Magazine, Publishers Weekly, U.S. News & World Report, Forbes Advisor and multiple academic journals. He and his family live in northern Alberta, Canada.
