Prohibited Conduct

Coast Capital Savings Federal Credit Union (“Coast Capital”) is governed by the Bank Act, which requires us to inform you of our obligation not to:

1. Impose undue pressure or coerce a person¹ for any purpose, including to obtain a product or service as a condition for obtaining another product or service from Coast Capital (also known as, ‘coercive tied selling’);
2. Take advantage of a person.

What is undue pressure?
Undue pressure means any pressure, imposed in the form of a practice or a communication or otherwise, that could be considered to be excessive or persistent in the circumstances.

What is coercive tied selling?
Coercive tied selling means being unduly pressured to buy a product or service you don’t want, from us or our affiliates, just to obtain another product or service. The following examples will help to illustrate coercive tied selling and what is not allowed:

Scenario 1: A Coast Capital mortgage specialist tells you that you qualify for a home mortgage. However, you are also told we will approve your mortgage only if you transfer your investments to Coast Capital or one of our affiliates.

Scenario 2: A Coast Capital credit officer tells you that you qualify for a Registered Retirement Savings Plan (RRSP) loan. However, you are also told we will approve the loan only if you redeposit the money in a Coast Capital GIC.

Both of these scenarios are examples of coercive tied selling, and are against the law. If you qualify for a product, a Coast Capital employee is not allowed to unduly pressure you to buy another unwanted product or service as a condition for receiving the product you want.

What IS NOT coercive tied selling?
Certain sales practices do not constitute coercive tied selling. For example, preferential pricing and bundling of products and services offers existing and potential members better prices or more favorable terms, as a tangible way to show our interest in your business and appreciation for your loyalty. Neither of these is coercive tied selling because they provide members the choice to buy the product or service on its own, or take advantage of preferential or bundling incentives.

What is preferential pricing?
Preferential pricing means offering members a better price or rate on all or part of their business with Coast Capital. You may be familiar with this if, for example, a printer offers a lower price per business card when you purchase a thousand cards instead of a hundred. Similarly, at Coast Capital, we 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 our products or services. The following examples will help to illustrate preferential pricing:

Scenario 3: After approving your application for a home mortgage from Coast Capital, your mortgage specialist tells you that this mortgage would be available at a lower interest rate if you transfer your investments to Coast Capital or one of our affiliates.

Scenario 4: After approving your application for a RRSP loan, your credit officer offers you a lower interest rate if you use the loan to deposit funds in a Coast Capital GIC.

The practices illustrated above are acceptable because the approvals of your mortgage and RRSP loan are not conditional on you taking another of our products or services. Preferential pricing simply encourages you to choose to provide us more of your business.

What is bundling of products and services? 
Coast Capital often combines products or services to provide members better prices, incentives, or more favourable terms. By linking or bundling our products or services, we are often able to offer them to you at a lower combined price, compared to buying each product on its own. A common example you may be familiar with is when a fastfood chain advertises a meal combination that includes a burger, fries, and a drink. The overall price is lower than if you bought each item separately. Similarly, we may offer bundled financial services or products so that you can take advantage of packaged prices that are less than the sum of the individual items. The following example will help to illustrate bundling of products and services:

Scenario 5: You plan to open a deposit account with charges for individual transactions. The Coast Capital employee offers a package of services including a comparable deposit account, a credit card with no annual fee, and a discount on purchasing office cheques. The total price for the package is less than if you purchased each product and service separately.

Bundling products and services in this way is permitted because you have the choice to buy the items individually or in a package.

How do we manage our credit risk?
Carefully managing the risk on the loans we approve, ensures the safety of our members, depositors, and creditors. At law, Coast Capital is allowed to impose certain requirements on borrowers as a condition for granting a loan, but only to the extent necessary to manage our risk. The following example will help to illustrate how we manage such risk:

Scenario 6: You apply for an operating loan for your business. To manage the risk associated with the loan, Coast Capital requires your business to maintain an operating account with us as a condition for obtaining the loan.

The above example is legal and necessary. Maintaining your business’ operating account with Coast Capital allows us to assess possible risks associated with your business’ cash flow, and manage the risk associated with the loan. However, our requirements for borrowers will always be reasonable and consistent with our level of risk.

Our commitment to you.
We expect all Coast Capital employees to comply with the law prohibiting undue pressure, coercion, or taking advantage of any person, for any purpose. To ensure this, we provide our employees with information and regular training on acceptable sales practices. We urge you to let us know if you believe you have experienced any of these prohibited activities in any of your dealings with us. Information regarding how to contact us can be found here.