February 7, 2025

Interest rates are at their highest in years and, according to banks and regulatory bodies, this has led to a surge in mortgage scams. As borrowing costs rise, more and more people in the US and UK are being tricked by fraudsters promising cheap rates for upfront fees, only for these con artists to vanish when it’s time to secure the loan.

Last year, the number of such scams reported by Lloyds Bank’s customers grew by 19%, following an 83% surge in 2022. Moreover, the Federal Trade Commission revealed that almost 26,000 of these fraudulent cases were reported in the US last year, with victims losing nearly $75 million.

The French Prudential Supervision and Resolution Authority has highlighted a similar upsurge in credit scams offering incredibly affordable loan interest rates. Jason Zirkle from the Association of Certified Fraud Examiners affirmed that these scams are increasing and pointed out how it’s astounding how minimal effort fraudsters exert to con people out of their finances.

Some victims, like Angela, a Wisconsin-based nurse who requested financial anonymity, share their unfortunate experiences with these scams in the hope of warning others. She was lured by a seemingly ideal offer from BetterMed, a Toronto-based financial company claiming to tailor to medical professionals. Despite waving a red-flag $15,500 upfront application fee, BetterMed managed to convince Angela that the fee would go towards her mortgage costs post-approval, which led her to transfer the money.

After Angela’s application was unexpectedly denied months later, she filed complaints against BetterMed with the Better Business Bureau and she also enlisted a lawyer. Regrettably, the company could not be reached for comment, and its contact information was taken down from its site. BetterMed claims to have offices in Toronto and New York, but there’s no record of the company’s presence in the listed buildings.

Even though lenders and mortgage brokers are required to be licensed with local financial authorities in the US and Canada, BetterMed seems to have evaded this requirement. The company website makes audacious claims like a “0% interest rate for 30 years” and a “100% approval program”. It also states all application fees are deducted from the repayment amount, yet ironically, terms of service clarify that no loan approval guarantees exist and according to the refund policy, “No Refunds” are given.

Despite glowing reviews on Medium and BetterMed’s website from apparent customers, the company’s online reputation is predominantly negative. It has numerous complaints on Reddit and it scored an “F” rating from the Better Business Bureau of Ontario.

Matthew Graham from Mortgage News Daily issued a serious warning about the red flags in BetterMed’s loan descriptions, expressing skepticism about the possibility of a 0% interest rate mortgage. Furthermore, Louise Baxter, founder of the National Trading Standards Scams Team in the UK, highlighted how the current high-interest rates and economic challenges create a ripe arena for scammers.

### Frequently Asked Questions

#### Why are mortgage scams increasing?
Mortgage scams are on the rise because of high-interest rates and increasing borrowing costs. Scam artists capitalize on the desperate need for lower rates, promising below-market rates in return for an upfront fee.

#### How do these scams operate?
These scams operate by baiting potential victims with excessively low-interest rates that are too good to be true. They charge a hefty upfront fee which they claim will be deducted from the total repayment amount. The reality, however, is that once the fee is paid, these scammers disappear, never to be heard from again.

#### What can be done to avoid falling victim to these scams?
It’s important to conduct thorough due diligence before entering into any financial agreement. Check the credibility of the lender, confirm that they are licensed under local financial regulatory bodies, and consider their online reputation. Don’t be drawn in by exceptionally low-interest rates and if a deal seems too good to be true, it normally is.