Being compensated by a bank? Watch out for the non-disclosure agreement

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An NDA legally binds you

An NDA isn’t just a formality. For instance, suppose you’re having an issue with your bank and you settle for a small amount. You sign an NDA, but then mention the settlement to your spouse, who then mentions it to some friends. As word gets out, thousands of people then seek settlements with the bank for the same issue.

Could you be held liable for all of those payments — since they began with you violating the NDA? It would be for the courts to decide, but since you were legally bound not to disclose the terms to anyone — including your spouse — the bank is entitled to come after you. Even if the court doesn’t find you liable, the process would cause you stress, time and money.

Understand your liability and explore your options

If you reach a settlement with your bank, carefully read all of the documentation. If there’s an NDA — and you’re not comfortable with it—ask the bank if you can have it removed. If they won’t budge (and if the amount you’re settling for is insignificant), then you could refuse to sign and forgo the settlement.

But if you want to accept the settlement, then you may have to agree to the NDA. If this is the case, be sure you fully understand it. For instance, what constitutes a breach? Are only the terms of the agreement confidential, or are you prohibited from disclosing the fact that you came to an agreement altogether? And how long does the NDA last?

If you agree to the NDA, it’s important to take it seriously. It is, after all, a legally binding agreement — so mum’s the word.

Consider opening an account at another financial institution

• Consider using a fintech bank alternative, such as KOHO. This all-in-one digital account lets you save, earn, pay bills and use a pre-paid credit card for all your saving and spending needs. Open a KOHO account and get a savings rate of 5% on all deposits.
• It only takes a few minutes to open a Neo Everyday Financial account. Open a Neo Everyday Financial account to earn 4% on all savings account deposits and avoid minimum deposits and pay no monthly fees.
• Or consider an account with a non-Big Six Bank, such as Laurentian Bank. Open a Laurentian Bank account and earn 2.75% on savings accounts with balances up to $100,000 or earn 3.75% on account balances between $100K and $5 million.

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