A friend I’ll call Tim had an interesting experience trying to open a secured line of credit with PC Financial. He was told that the processing fee for home appraisal and basic legal fees would be $150. However, he was later contacted by another organization looking for another $83.
It turns out that PC Financial hires other organizations to handle some aspects of checking people’s credit worthiness. In this case, there happens to be a “Writ of Execution” against another person with the same name as Tim (including first name, last name, and middle initial). This other organization wants the extra $83 to cover their cost of having Tim sign an affidavit stating that he isn’t the same person as the deadbeat in addition to the cost of having the document properly witnessed.
Tim was a little suspicious and contacted PC Financial about this extra charge. PC Financial confirmed that the charge is legitimate. (I suppose that “legitimate” is in the eye of the beholder here. At least PC Financial thinks the charge is legitimate.)
At this point the offer from PC Financial seems to be a prime+1% secured line of credit for a one-time fee of $233. I’m not sure if that includes taxes or not. This brings up some questions for knowledgeable readers:
1. Is prime+1% and a $233 opening fee reasonable for a secured line of credit for someone with a pristine credit record like Tim? Is Tim likely to get a better deal elsewhere?
2. Is it now common practice for bank customers to be surprised by organizations they’ve never heard of asking for money to open accounts?