MONTREAL (CN) – Quebec regulators have barred an online loan and “investment” company for a multitude of sins, including exorbitant interest rates, promising fat returns on unregistered investments, and claiming to be overseen by a Canadian “Banking Commission,” which does not exist.
Micro-Prets (Micro-Loans) has been trolling the Internet for customers since 2010. It offered loans of $500 and misrepresented the “investments” it offered, according to the Autorité des Marches Financiers, Quebec’s financial market regulator. The Authority’s complaints led the Bureau de Decision et de Revision to ban Micro-Prets from dealing in securities.
In issuing loans, Micro-Prets demanded, among other things, 50 percent of the borrower’s next paycheck, or a 20 percent fee for each $100 borrowed, plus 30 percent annual interest.
Micro-Prets promised investors returns of 12 percent on investments, but was not registered with the AMF, according to the order from the Bureau de Decision et de Revision.
The ruling states that Micro-Prets and its co-defendants, president Dominic Lacroix and secretary-treasurer Marc-Olivier Boucher, illegally acted as securities dealers or advisers and engaged in illicit activity, such as extending loans indiscriminately, financing loans through illegal distributions, and claiming that their company was a financial institution overseen by a “Banking Commission,” though there is no such commission in Canada.
The Bureau froze Micro-Prets’ accounts and barred Lacroix and Boucher from operating as securities advisers or dealers, either directly or through the Internet. It also ordered the men to shut down the company’s website.
The government agencies say they acted “to protect the investing public and the public’s confidence in the integrity of the financial markets for the establishment of effective control measures.”
The Micro-Prets website was still up and running last weekend, though the investment portion of the site had been deleted.
L’Office de la Protection du Consommateur, Quebec’s consumer protection board, is named as a third-party defendant; it apparently is coordinating its efforts with the AMF’s continuing investigation of Micro-Prets.
The amount of loans extended and investor funds taken has yet to be determined.