Tying in Australian Finance: 2025 Guide for Consumers & Businesses

Tying isn’t just a legal or regulatory buzzword—it’s a practice that can have a big impact on the way Australians buy, borrow, and do business. In 2025, as consumer protection laws and competition watchdogs sharpen their focus, understanding how tying works in finance has never been more crucial. Whether you’re a business owner navigating complex loan packages or a consumer shopping for a mortgage, the way products are bundled together could affect your choices and your bottom line.

What Is Tying? The Finance Perspective

In financial services, tying refers to the practice where a provider makes the sale of one product conditional on the purchase of another. For example, a bank might require a customer to take out home insurance with them to access a particular mortgage deal. While some forms of bundling can offer convenience or discounts, tying can cross the line into anti-competitive territory—something that regulators like the Australian Competition and Consumer Commission (ACCC) keep a close eye on.

• Example 1: A small business applies for a business loan and is told approval depends on moving all its transaction banking to the lender.

• Example 2: A consumer wants a car loan, but the lender insists they also purchase an extended warranty or add-on insurance.

Under Australian law, not all bundling is illegal—but tying that restricts competition or forces unwanted products on consumers can trigger regulatory action.

2025 Policy Updates: The Regulatory Spotlight on Tying

This year, the ACCC and the Australian Securities and Investments Commission (ASIC) have signalled a renewed focus on anti-competitive tying in the banking, insurance, and superannuation sectors. With the rise of digital finance platforms and the ongoing scrutiny of big bank behaviour, several key policy developments stand out in 2025:

• Stronger Penalties: Amendments to the Competition and Consumer Act 2010 now enable higher fines for financial institutions found guilty of illegal tying practices, with penalties reaching up to $50 million per breach.

• Greater Transparency: Lenders and insurers are now required to disclose when products are bundled, including any financial incentives or requirements to buy additional services.

• Consumer Redress: New complaint mechanisms allow consumers and small businesses to report suspected tying arrangements directly to ASIC, with streamlined processes for refunds or contract exits.

These changes are designed to foster competition and protect Australians from being nudged—or forced—into deals that aren’t in their best interests.

How Tying Affects Your Choices and Costs

Tying can influence more than just what you buy—it can affect your negotiating power, the true cost of financial products, and even your ability to switch providers. Here’s how:

• Reduced Competition: When large institutions bundle products, it can be harder for new entrants or smaller competitors to win your business, leading to less choice and potentially higher prices.

• Hidden Costs: The advertised rate on a loan or insurance policy might look attractive, but tying could mean you pay more overall if you’re compelled to purchase unwanted extras.

• Switching Barriers: Tying can lock you in—making it costly or cumbersome to move your loan, insurance, or superannuation to a better deal elsewhere.

In 2025, comparison sites and digital brokers are helping to shine a light on bundled offers, but it pays to read the fine print and ask direct questions about any conditions attached to financial deals.

Real-World Examples: Tying in Action

Recent ACCC investigations have uncovered tying in sectors ranging from agribusiness lending (where farmers were required to buy insurance from the same bank) to fintech platforms that linked personal loans with compulsory investment products. In one high-profile 2025 case, a major insurer faced penalties after making income protection cover contingent on purchasing life insurance, sparking widespread consumer backlash and a review of industry practices.

For small businesses, government-backed initiatives now provide guidance and template letters for challenging unfair tying clauses in contracts. Meanwhile, consumer advocacy groups are pushing for even greater transparency and simpler disclosure rules, ensuring Australians can spot and avoid tying traps.

What Should You Do?

If you suspect you’re being pressured into a tied arrangement, don’t hesitate to:

• Ask for written details of any bundled offer or requirement

• Request alternative quotes or seek out independent providers

• Report concerns to the ACCC or ASIC using their updated 2025 online portals

Knowledge is power—and in the world of finance, knowing your rights around tying can help you save money and make smarter choices.