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ING DIRECT's Statement on Coercive Tied Selling

This Statement on Tied Selling (the "Statement") affirms that ING DIRECT respects your right to freely choose service providers and products. In support of this commitment, ING DIRECT will continue to train and educate staff on acceptable selling practices and will reinforce instruction on tied selling, including its obligations under the Statement.

Why Did We Create This Statement?

The Bank Act requires banks to inform Clients in plain language that coercive tied selling is illegal. To comply with the law, ING DIRECT has created this statement comprised of:

What is coercive tied selling?
What is not coercive tied selling?
What is Bundling of Products and Services?
The ING DIRECT Pledge to our clients
Who to contact if you have any further questions, complaints or concerns regarding ING DIRECT's statement on Coercive Tied Selling.

What is coercive tied selling?

Section 459.1 of the Bank Act prohibits banks from practicing coercive tied selling. 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 to explain 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 apply for a line of credit, and your bank's credit officer tells you that you qualify. However, you are also told that the bank will approve the line of credit only if you move your mortgage to the bank. You want the line of credit, but you want to leave your mortgage where it is.

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

What is NOT Coercive Tied Selling?

Most businesses, including ING DIRECT, look for ways to show their interest in your business and appreciation for your loyalty. Sales practices, such as bundling of products and services, offer new and existing Clients better prices. This practice should not be confused with coercive tied selling, as defined by the Bank Act. This practice may be familiar to you in your dealings with other businesses.

What is 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 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 to explain the bundling of bank products and services:

You plan to take out a loan to make your RSP contribution. The bank offers a discounted rate for an RSP loan that is bundled together with investment products offered by the bank and/or its affiliates. The total price for the package is less than if you obtained the loan separately from the bank's (or bank affiliate's) investment products. Alternatively, the bank offers other loan types at different rates.

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

The ING DIRECT Pledge to our clients

ING DIRECT will not pressure or coerce you to obtain a product or service from ING DIRECT or any of its subsidiaries and affiliates as a condition to obtain a loan or any other product from ING DIRECT.

Managing Credit Risk

ING DIRECT has an obligation to manage credit risk prudently; our Clients benefit when we exercise this obligation faithfully. For the purpose of managing credit risk, ING DIRECT may place certain requirements on borrowers, as a condition of extending credit. For example, ING DIRECT may require a borrower to obtain a product or service, such as a transaction or operating account, or refrain from taking on additional debt, as a condition of granting a loan.

In addition, ING DIRECT may require security from the borrower for the loan and the security must meet ING DIRECT's approval.

Security taken by ING DIRECT against a loan is taken for the sole purpose of managing our risk and will be equal to the level of the risk undertaken by ING DIRECT. For example, the amount of the loan is secured by the equity in the home for the same amount (i.e. a $100,000 line of credit is secured against a $100,000 collateral mortgage).

Who to contact if you have any further questions, complaints, or concerns regarding ING DIRECT's statement on Coercive Tied Selling.

Questions or concerns about tied selling, or about ING DIRECT's compliance with this Statement on Tied Selling, can be answered by calling 1-800-464-3473.

Or e-mail us at: clientservices@ingdirect.ca

Or write us at:

Client Services
111 Gordon Baker Rd
Toronto, ON M2H 3R1

If your questions or complaints are not resolved to your satisfaction, please write to:

The Ombudsman
ING DIRECT
111 Gordon Baker Road, 9th Floor
Toronto, ON M2H 3R1