We never received the promised loan. Using a fake name, we called back. Surprise, we got a loan approved for the same upfront money when obviously they didn't do any checking or they would have found out that no such person existed. One company even sent us a fax to the fake name, when we asked them to confirm the loan in writing. Well they can.
Police can lay fraud charges.
But proving fraud takes manpower and time. Also, much of the scam is done long distance by phone, fax or mail. And it's hard to get them to court to give evidence. To make things simpler, some provinces have brought in new loan broker laws. In Ontario, British Columbia and Nova Scotia, it's now illegal to charge up-front fees for loans no matter what the reason.