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Frequently Asked Questions
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Question:
What's the difference between coercive tied selling and beneficial tied selling?
Answer:
Coercive tied selling is against the law. Banks are not allowed to impose undue pressure on consumers, or to "coerce" an individual to buy a product or service as a condition for obtaining another product or service from them. However, sales practices such as preferential pricing or "beneficial tied selling" — where customers are offered better prices or more favourable terms and conditions on bundles of products or services — are acceptable, as long as the products or services can also be purchased separately if the consumer wishes. However, purchasing products or services separately may change the prices. Bundling or combining products or services often benefits consumers by offering more, more convenience and more savings.
Banks are required to display, and to make available in their branches, a statement in clear language that advises customers about the prohibition on coercive tied selling. If you think that you have been subjected to coercive tied selling, you can have the matter investigated through your bank's complaint-handling process. You can also contact the Financial Consumer Agency of Canada (FCAC). We can investigate to determine whether your financial institution has complied with its legal obligations.
The law requires all federally regulated financial institutions to have a complaint-handling process in place to help resolve disputes between consumers and their financial institutions. This process includes a third-party dispute-resolution body.
FCAC publishes the complaint-handling process for all federally regulated financial institutions on its Web site. You can find the complaint-handling process for your financial institution here. You can also call our Consumer Contact Centre toll-free at 1-866-461-3222.
Classification of this FAQ:
| Category | Sub-category |
|---|---|
| Accounts | Tied selling |
| Consumer protection | |
| Consumer services | Tied selling |
| Loans | Tied selling |
| Mortgages | Tied selling |
Related Question(s):
- Can my bank force me to open an RRSP account with them or transfer my existing RRSP account as a condition for receiving an RRSP loan (coercive tied selling)?
- Can my financial institution make me take out insurance when I apply for a loan or a mortgage?
- What happens to my mortgage life insurance when I renew my mortgage?
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