President's Choice Financial|About tied selling

Information to understand coercive tied selling

The Bank Act requires banks to inform customers in plain language that coercive tied selling is illegal. To comply with the law, we have created this page to help you understand coercive tied selling:

What is coercive tied selling?

Coercive tied selling is illegal and is prohibited under Section 459.1 of the Bank Act. More specifically, it is against the law for a bank to "impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the bank and any of its affiliates, as a condition for obtaining another product or service from the bank".

You cannot be unduly pressured to buy a product or service that you don't want from a bank or one of its affiliates, to obtain another bank product or service.

The following two examples will help you understand coercive tied selling and what is not allowed.

Your bank's mortgage specialist tells you that you qualify for a home mortgage. However, you are also told that the bank will approve your mortgage only if you transfer your investments to the bank or its affiliates. You want the mortgage, but you do not want to move your investments.

You are advised that you qualify for a Registered Retirement Savings Plan (RRSP) loan. However, you are also told that the bank will approve the loan only if you use the money to buy the bank's mutual funds. You want the loan, but you want to invest the money elsewhere.

Both of the above practices are against the law. If you qualify for a product, a banking representative is not allowed to unduly pressure you into buying an unwanted product or service as a condition of obtaining the product you want.

What is not coercive tied selling?

Some businesses look for tangible ways to show their interest in your business and appreciation for your loyalty. Sales practices, such as preferential pricing and bundling of products and services, offer potential and existing customers better prices or more favourable terms. These practices should not be confused with coercive tied selling, as defined by the Bank Act. Many of these practices will be familiar to you in your dealings with other businesses.

Preferential pricing

Preferential pricing means offering customers a better price or rate on all or part of their business. For example, a printer offers a lower price for each business card if you buy a thousand cards instead of a hundred. A shoe store offers a second pair of shoes at half price.

Similarly, a bank may be able to offer you preferential pricing — a higher interest rate on investments or a lower interest rate on loans — if you use more of its products or services.

The following two examples will help you understand preferential pricing in banks.

After approving your application for a home mortgage, your bank's mortgage specialist tells you that this mortgage would be available at a lower interest rate if you transferred your investments to the bank or its affiliates.

After approving your application for an RRSP loan, you are offered a lower interest rate if you use the loan to buy the bank's mutual funds.

The above practices are acceptable. The approval of your mortgage and RRSP loan is not conditional on your taking another bank product or service. Rather you are offered preferential pricing to encourage you to give the bank more business.

Bundling of products and services

Products or services are often combined to give consumers better prices, incentives or more favourable terms. By linking or bundling their products or services, businesses are often able to offer them to you at a lower combined price than if you bought each product on its own. For example, a fast-food chain advertises a meal combination that includes a hamburger, fries and a drink. The overall price is lower than if you bought the three items separately.

Similarly, banks may offer you bundled financial services or products so that you can take advantage of package prices that are less than the sum of the individual items.

The following example will help you understand the bundling of bank products and services.

You plan to open a bank account that charges you for individual transactions. You are offered a package of services that includes a comparable bank account, a credit card with no annual fee and a discount on purchasing traveller's cheques. The total price for the package is less than if you purchased each part of the package separately.

Bundling products in this way is permitted because you have the choice of buying the items individually or in a package.

Risk management

To ensure the safety of their depositors, creditors and shareholders, banks must carefully manage the risk on the loans and credit cards they approve. The law, therefore, allows banks to impose certain requirements on borrowers as a condition for granting a loan - but only to the extent necessary for banks to manage their risk.

The following example will help you understand how banks manage such risk.

You apply for an operating loan for your business. To manage the risk associated with the loan, your bank requires your business to have an operating account with the bank as a condition for obtaining the loan.

The above example is legal and appropriate.

Having your business's operating account at the bank allows your bank to assess possible risks associated with your business's cash flow and manage the risk associated with the loan.

Our requirements for borrowers will be reasonable and consistent with our level of risk.

What can you expect from us?

You can expect all CIBC employees to comply with the law by not practicing coercive tied selling. To that end, we provide training programs on acceptable sales practices. We urge you to let us know if you believe that you have experienced coercive tied selling in any dealings with us.

how to resolve concerns with President's Choice Financial services

talk to us. We constantly strive for excellence in customer service, however, despite our best efforts, errors occasionally do occur. If you have a concern, please let us know right away by:
- calling 1-888-723-8881 and discussing with one of our Personal Banking Representatives or Team Leaders
- calling the following numbers for issues surrounding President's Choice Financial Mortgages: 1-888-276-3744 (before funding) or 1-888-866-0866 (after funding)
- submitting an easy online feedback form
- writing to us at:
    President's Choice Financial services
    P.O. Box 603, Stn. Agincourt
    Scarborough, ON M1S 5K9
contact our Customer Care Centre. If your concern is not resolved to your satisfaction by any of the above means, you can:
- call us at 1-888-723-8881 and ask to be transferred or referred to a Customer Care Manager
- write to the attention of our Customer Care Centre at the address indicated above
your right to an independent review. Assuming you have followed the complaint escalation steps outlined above and you remain unsatisfied with Customer Care's resolution, you can contact the CIBC Ombudsman. Then, if the matter falls within the CIBC Ombudsman’s mandate (www.cibc.com/ombudsman), and providing legal action has not been taken on the matter, the Ombudsman will conduct a further investigation. You can reach the CIBC Ombudsman by:
- phone: 1-800-308-6859 or 416-861-3313 (Toronto area)
- fax: 1-800-308-6861 or 416-980-3754 (Toronto area)
- e-mail: ombudsman@cibc.com
- mail:
    CIBC Ombudsman
    P.O. Box 342, Commerce Court
    Toronto, ON M5L 1G2
If the above steps do not resolve your complaint, you may consider escalating the matter to Independent Consumer Support Agencies. There are a number of external agencies that monitor Canada’s financial industry to ensure compliance and reliable access to financial services.

Ombudsman For Banking Services And Investments (OBSI)

You can contact the OBSI who is independent from CIBC and whose purpose is to review your personal or business complaint when you do not accept the decision of the CIBC Ombudsman; or when 90 days have elapsed since escalating your concerns to our Customer Care Centre. Where appropriate, OBSI may seek the assistance of the firm’s internal complaint-resolution staff – including the internal bank ombudsman – to facilitate the earliest possible resolution of your complaint. You can reach the OBSI by:
- phone: 1-888-451-4519
- fax: 1-888-422-2865
- e-mail: ombudsman@obsi.ca
- web site: www.obsi.ca
- mail:
    Ombudsman for Banking Services and Investments
    401 Bay Street
    Suite 1505, P.O. Box 5
    Toronto, ON
    M5H 2Y4

If you choose to contact the OBSI at the conclusion of the CIBC Ombudsman investigation, you should do so, within six months from the date of CIBC’s response to you, as OBSI reserves the right to decline any investigation after that time.

The Financial Consumer Agency Of Canada (FCAC)

You can also contact the FCAC. The FCAC supervises federally regulated financial institutions to ensure they comply with federal consumer protection laws. The FCAC also helps educate consumers and monitors voluntary codes of conduct and public commitments designed to protect the interests of consumers. Federal consumer protection laws affect you in a number of ways. For example, financial institutions must provide you with information about their charges, interest rates and complaint handling procedures. If you have a regulatory complaint or a complaint concerning a voluntary code of conduct, you can contact the FCAC by:

phone: 1-866-461-3222
1-866-461-2232, en français
web site: www.fcac-acfc.gc.ca
mail:
  Financial Consumer Agency of Canada
  6th Floor, Enterprise Building
  427 Laurier Ave. West
  Ottawa, ON
  K1R 1B9

The FCAC will determine whether the financial institution is in compliance. It will not, however resolve individual consumer complaints.

The Privacy Commissioner of Canada

If your concern involves a privacy issue you may contact the Office of the Privacy Commissioner of Canada by:

phone: 1-800-282-1376 or 613-995-8210 (Ottawa area)
fax: 613-947-6850
web site: www.privcom.gc.ca

®PC, President's Choice and President's Choice Financial are trademarks of Loblaws Inc. CIBC licensee of marks.