The Financial Services Commission of Ontario is warning that an old scam has appeared preying on people trying to obtain loans over the Internet.

FSCO says that, in this latest version of the scam, people applying for loans from companies over the Internet are told that the loan has been approved, but they need to take out an insurance policy on the loan. The scammers then ask the people applying for the loan to pay a premium on an insurance policy. Once they pay the premium they never hear from the company again.

“We do everything we can to try and protect consumers, but unfortunately, people will take risks without looking closely at what they are being offered,” said Bryan Davies, CEO of FSCO, in a news release. “Companies who sell insurance products in Ontario must be licensed in Ontario. Any legitimate company that makes loans may arrange life and/or disability insurance on the loan and those premiums may be part of the repayment schedule.”

Davies advises people seeking loans, where someone is asking for money up front, “Don’t do it. It is a scam.”

When purchasing any insurance product in Ontario, consumers should check the FSCO Web site to ensure the people they are dealing with are licensed to operate in Ontario.