Banks in Canada are not allowed to engage in “coercive tied selling” or “forced purchases.” This means that banks are not allowed to unduly pressure or coerce you into obtaining a product or service from them or from their affiliates, as a condition for obtaining another product or service from them. This practice, called coercive tied selling, is illegal in Canada.
For example, if you apply for a mortgage at a bank, the institution cannot make you buy another product or service as a condition for obtaining the mortgage.
However, banks (and their affiliates) are allowed to offer consumers, in conjunction with one of their products, another product or service on more favourable terms than they normally would provide. This is similar to a company offering a deal or discount to its customers if they purchase more than one item from the company. For example, if you obtain a loan from a bank to purchase a Registered Retirement Savings Plan (RRSP) investment, the bank might offer you a better rate on your loan if you also purchase your RRSP investment from them.
Banks are also required to display, and make available in their branches, a statement that advises customers about the prohibition on coercive tied selling.
FCAC monitors compliance with this requirement.
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