Charlene Hatcher could have taken the money. But then, she wouldn’t have been able to talk about what happened.
Scammers had called her one day in mid-September last year, posing – quite convincingly – as employees of the Bank of Nova Scotia. They knew her date of birth, current and previous addresses, and listed some of her recent transactions, she said. They also appeared to already have her bank personal identification number.
When they urged her to give her supposedly compromised debit and credit cards to a courier, she complied. Instead, the fraudsters used the cards to withdraw thousands of dollars.
Toronto Metropolitan University student Charlene Hatcher became the victim of a financial scam that wiped out her savings.Sammy Kogan/The Globe and Mail
When Ms. Hatcher, a student at Toronto Metropolitan University, noticed the unauthorized transactions the following morning, she immediately called Scotiabank. But she had to rush to a branch and talk to a manager before the bank realized she was a scam victim. Even then, the bank did not immediately freeze her accounts, according to Ms. Hatcher.
All the while, the fraudsters wiped out her savings. Overall, Ms. Hatcher said she suffered a loss of around $20,000.
In the following months, the bank denied any responsibility for it, saying Ms. Hatcher had failed to safeguard her banking information, according to correspondence reviewed by The Globe and Mail. But in January, it offered her $5,000 as a goodwill gesture.
There was just one catch. She had to agree to a confidentiality clause. The letter presenting the bank’s offer said she should not share the communication with anyone but a professional adviser, such as a lawyer or an accountant, or an external regulator.
Reading that line in the document, she froze.
“I was sitting there looking at it, like: Is this even real? What is this?” she said.
Instead of answers, the bank was offering a puny amount of money to keep quiet about it all, she said. She didn’t sign.
Though Ms. Hatcher's bank denied any responsibility for her financial loss, it offered her $5,000 on the condition that she agree to a confidentiality clause.Sammy Kogan/The Globe and Mail
(Scotiabank said it cannot comment on the matter for privacy reasons, but it would never send a courier to pick up debit or credit cards. It added that it invests extensively to detect and prevent fraud, and to educate customers about scams.)
Ms. Hatcher’s experience is common. From financial institutions, through retailers and hotels, to homebuilders and car dealers, companies have come to include non-disclosure agreements (NDAs) as a matter of course when settling clients’ complaints out of court.
Originally meant to help businesses protect trade secrets, NDAs have come under scrutiny in recent years for their use in cases of alleged discrimination, harassment and sexual misconduct. The risk, in those circumstances, is that confidentiality requirements can silence victims and allow perpetrators to continue the abuse, a concern that has prompted jurisdictions in Canada and the United States to curtail the use of the agreements.
But NDAs and similar provisions are also ubiquitous – and increasingly expansive – in consumer disputes. Companies in virtually every industry are reaching for sweeping clauses that gag customers in order to protect the companies from anything from bad media coverage to negative social media posts and unflattering reviews, critics say.
“These types of anti-free-speech clauses spread virally,” said Harold Geller, an Ottawa-based financial loss litigation lawyer who helps clients with disputes against companies, including financial institutions and insurers.
“If one lawyer gets away with it, their whole firm adopts it. When the opposing firms see it, they start using it,” he said. NDAs and similar terms have become part of settlement templates, he added.
“I can discern no regard to proportionality or common sense in the use of NDAs,” he added via e-mail.
Demanding silence in exchange for refunds and reparations has become routine whether the dispute involves trivial amounts or lifetime savings. The Globe has spoken to Canadians who have been asked to sign confidentiality clauses for compensation ranging from a few hundred dollars to several hundred thousand dollars.
Jurisdictions across Canada are starting to wake up to the issue, with several provinces adopting laws that explicitly restrict unfair contracts and certain secrecy clauses. But there’s real debate about how to handle the problem.
Transparency advocates say the pervasive and unbridled use of NDAs in consumer matters should raise concern. Overly broad confidentiality clauses exploit a fundamental imbalance of power between businesses and their clients, they say. At worst, companies can use them to hide customer safety problems or other systemic issues from regulators and the public, they argue.
“The concern appears to be the risk of other victims learning about the wrong, their rights and other victims’ success in seeking compensation,” Mr. Geller said.
Usually, breaking a confidentiality agreement comes with the risk that the company will demand to take back any compensation as a remedy, said Julie Macfarlane, distinguished professor emerita at the University of Windsor and the co-founder of advocacy group Can’t Buy My Silence.
Investor advocate Ken Kivenko.Kate Dockeray/The Globe and Mail
Sometimes, though, NDAs also include clauses that impose additional financial penalties on customers for breaching the contract. Even when consumer protection laws clearly stipulate that customers are entitled to a refund or compensation, they bind themselves to silence if they sign a confidentiality clause.
In Brentwood Bay, B.C., Kathleen Zimmerman was asked to sign an NDA over a little more than $400 after her then investment firm, Credential Securities Inc., now Aviso Wealth Inc., misplaced a charitable donation on her behalf.
In the summer of 2023, Ms. Zimmerman had filled out forms instructing the firm to make two separate stock donations, one to the First Unitarian Church of Victoria and one to the Metro Vancouver YWCA. The company, though, mistakenly made both donations to the church.
Then, when she discovered and flagged the error a few months later, someone at the firm reused the previous form to make a donation to the YWCA, this time without Ms. Zimmerman’s authorization.
Eventually the company acknowledged both errors and agreed to her request for a refund of around $440, equivalent to depreciation of the YWCA stocks between when she had intended for the donation to be made and when it was actually made.
But before releasing the funds, Credential Securities asked Ms. Zimmerman to sign a confidentiality clause as part of a release agreement.
She remembers feeling dumbfounded by the request. “I thought, for $440 this is overkill in the ninth degree,” she said.
Because the amount was so small, she didn’t think twice about writing back saying she wouldn’t sign the NDA. The company agreed to provide the refund anyway.
Sean Kelly, a spokesperson for Aviso, said the firm follows standard industry practice in proposing a release agreement when resolving a client complaint.
“These agreements are not intended to limit clients’ ability to raise concerns or seek redress, but rather to provide clarity and finality once a matter has been resolved,” he said via e-mail.
In Toronto, Ms. Hatcher, the Scotiabank client, also said the relatively small sum the bank offered her – $5,000, which was much smaller than the $20,000 she lost to the scam – made it easier to reject the NDA.
She has now taken her complaint to the Ombudsman for Banking Services and Investments (OBSI), a national non-profit body that can settle disputes between banks or investment firms and their clients that the parties can’t resolve on their own.
After rejecting the NDA, Ms. Hatcher, a Scotiabank client, has taken her complaint to the Ombudsman for Banking Services and Investments.Sammy Kogan/The Globe and Mail
Companies are increasingly demanding that clients sign NDAs even for small settlement offers, said Ken Kivenko, president of Kenmar Associates, a consulting service, and a prominent investor advocate. When settlements are in the range of $15,000 to $20,000, he’s seen investors agonize over whether to agree to confidentiality, though most ultimately do.
Advocates say it’s much rarer for consumers to push back against confidentiality requests when a lot of money hangs in the balance. Yet, especially in cases of egregious wrongdoing where large sums are at stake, agreeing to an NDA can take a heavy emotional toll on victims, they say.
The Globe spoke to a woman in southwestern Ontario who said she signed a confidentiality agreement to settle a financial mismanagement case involving hundreds of thousands of dollars of her family’s savings. Even more than 10 years after the fact, knowing she can’t speak about what happened has left her feeling a crushing sense of injustice, she said.
The Globe has agreed to not identify her because she isn’t allowed to discuss the case under the terms of the contract she signed.
The trouble started when she turned to a financial adviser at a major Canadian investment firm to manage her dad and a relative’s savings, after being granted power of attorney for both elderly men.
Despite giving clear instructions to keep the money in safe, liquid assets, she discovered a year later that the funds had been placed in high-risk mutual and segregated funds. Worse, the adviser had been transferring money between the two accounts, masking steep investment losses.
Records from the Mutual Fund Dealers Association of Canada – now part of the Canadian Investment Regulatory Organization (CIRO) – show the regulator opened a case against the adviser after his employer reported several instances of misconduct involving multiple clients and ultimately terminated him for cause.
Still, it took years of litigation before the firm agreed to settle for an amount that roughly matched the loss her family had suffered. And the bank asked her to sign an NDA that barred her from discussing any details of the case. In her understanding of the document, a breach of contract would give the company the right to pursue repayment.
“This turns your life upside down and inside out,” she said. “Knowing you can’t speak about it prevents the healing.”
While the use of confidentiality agreements is ubiquitous in financial disputes, it has also become common in a variety of other settlements involving consumers, said Prof. Macfarlane.
Toronto resident Mary Weber, for example, was asked to sign an NDA by a Volvo dealership near Montreal where she’d bought a certified pre-owned Volvo XC60 that she says began showing signs of severe mechanical problems almost as soon as she drove it off the lot.
Merging onto the highway on her way to Ottawa, where she was visiting friends before going back home to Toronto, Ms. Weber said she felt the mid-sized SUV suddenly decelerate, just as another vehicle “was tearing down from behind.” She was terrified.
Not long after, the brakes seized, making it hard to steer the car.
There was also that smell, the one she couldn’t get rid of. “Like wet laundry.”
When Ms. Weber took the car to a Midas International LLC location in Ottawa for an independent checkup, it immediately failed the safety inspection.
Documents reviewed by The Globe show mechanics at Midas recommended brake pad and rotor replacement. A Midas representative said the company submitted the results of the failed inspection to Ontario’s Ministry of Transportation, as required by law.
After a vehicle Toronto resident Mary Weber purchased at a Volvo dealership in Quebec experienced severe mechanical problems, the company offered a financial settlement on the condition she agree to confidentiality.SAUL LOEB/AFP/Getty Images
The results of the test were a shock for Ms. Weber, who had just resumed driving after an injury from a 2018 vehicle collision forced her into early retirement.
“I nearly had a heart attack,” she said. “I hadn’t been driving for seven years and all of a sudden the car is declared unfit to drive.”
Justine Descôteaux, a spokesperson for Park Avenue Volvo Brossard, the Montreal-area dealership, said that when Ms. Weber brought in the vehicle for inspection at a Volvo shop in Ontario after the incident, staff identified only normal wear on certain components.
Still, as a “gesture of goodwill,” Volvo replaced the brakes on all four wheels at no charge, Ms. Descoteaux said.
In addition to replacing the brakes, the dealership referred her to a Volvo location closer to her home in Toronto for further service. Documents seen by The Globe show that dealership confirmed the presence of “strong [mould] mildew not caused by everyday driving.”
After months of back and forth with the Quebec dealership, Ms. Weber said the company offered her the five-figure settlement. But she had to agree to confidentiality to get the money.
She asked for time to think. The amount offered, she said, didn’t even begin to cover the expenses – which she estimates surpassed $100,000 – the toll on her well-being, or hours spent on phone calls and e-mails disputing her case.
Ms. Descoteaux said it’s common for settlement agreements to include confidentiality provisions, adding that “in all cases, these discussions are voluntary.”
Ms. Weber said that shortly before Christmas, Volvo sent a full and final settlement offer, “then informed me they would never speak to me again about the car, if I didn’t accept the NDA or their offer.”
“I asked for time,” Ms. Weber said, but the offer ultimately expired.
She has largely refrained from driving since, paying for Ubers and taxis instead.
While companies used to offer to pay extra to wronged clients in exchange for confidentiality, NDAs have now become a default part of the terms of a dispute settlement, said Matthew Taylor, a Toronto-based litigation lawyer who helps investors who have suffered losses because of bad advice, negligence, fraud or other malpractice.
“Silence is the condition to getting any money,” he said.
In her case, Ms. Zimmerman refused to sign an NDA and found the request by Aviso Wealth (formerly Credential Securities) to be a disproportionate response.Chad Hipolito/The Globe and Mail
Non-disclosure clauses have also become more expansive, often attempting to impose confidentiality not only on an individual signatory but on their family and heirs, said Rick Price, a long-time investor who’s aware of the proliferation of NDAs in the financial industry.
And businesses are increasingly resorting to non-disparagement provisions, which prevent customers from sharing anything that might damage a company’s reputation – even if it’s factually accurate. It’s a nebulous concept that often leaves consumers vulnerable to firms’ subjective interpretation of what constitutes disparagement, she added.
Prof. Macfarlane says she’s seen consumers asked for confidentiality over something as mundane as exchanging a defective boiler.
In real estate, confidential settlements made it easier for some developers in Ontario to get homebuyers to agree to surprise charges above the original purchase price during the COVID-19 pandemic-driven housing boom between 2020 and 2022, said consumer advocate Barbara Captijn.
As home prices and construction costs soared, some homebuilders began revising up the prices of homes they’d agreed to build before the pandemic, said Mrs. Captijn.
The companies told homebuyers they’d have to cover price increases at times as steep as $100,000 or $200,000 on preconstruction homes for which those buyers had already signed sales contracts and put down deposits.
Buyers often felt they had no choice but to pay up because home prices had risen so much since each of them signed their preconstruction sales agreement. They would be priced out of the market and unable to afford to purchase a different home if they walked away, Ms. Captijn said.
In other cases, developers simply failed to build the homes as promised, but held on to buyers’ deposits, which don’t have to be kept in a legal trust in Ontario for freehold homes.
During the COVID-19 pandemic-driven housing boom, confidential settlements made it easier for some developers in Ontario to get homebuyers to agree to surprise charges above the original purchase price.Justin Tang/The Canadian Press
Yet some homebuyers had signed contracts with pre-emptive NDAs stipulating they couldn’t speak publicly of any dispute that might arise with their developer or they would risk losing their deposit and face additional penalties, Ms. Captijn said.
The clauses made it hard for buyers to join forces with others in similar situations to push back against developers’ requests or to warn other house shoppers about the egregious conduct of certain companies, she said.
“What’s so insidious and so nasty about these NDAs and so bullying is that a large corporation can get away with a lot because people are backed into a corner. They need the home,” Ms. Captijn said.
Going to court – a process that easily costs hundreds of thousands of dollars in legal fees and that could drag on for years – isn’t an option for most people, she said.
Yet precisely because going to court is so costly and time-consuming, some consumer advocates are wary of proposals to ban or severely curtail the use of NDAs.
In the financial industry, NDAs can make it easier for institutions and securities dealers on one side, and clients on the other, to reach settlements out of court, said Jean-Paul Bureaud, executive director at FAIR Canada, a national organization that champions individual investors.
“The dealer’s interest is to bring finality to the complaint and the interest of the client is to get the compensation,” he said.
Also, CIRO explicitly forbids investment and mutual fund dealers from including clauses in settlements that would prevent clients from initiating or pursuing complaints with CIRO itself, securities regulators or other authorities.
In Quebec, the Autorité des Marchés Financiers, the province’s financial regulator, adopted similar rules last July. Their rules prohibit a firm or a financial institution from presenting a settlement offer with conditions that bar a client from having their complaint record examined by the AMF, or from communicating with the AMF, CIRO or Quebec’s Chambre de l’Assurance, which oversees property insurance agents, brokers and claims adjusters.
In general, securities legislation across Canada requires dealers and advisers to deal fairly and in good faith with clients. Settlements that prohibit clients from complaining to regulators or OBSI “could potentially be unfair conduct” under those rules, Ilana Kelemen, a spokesperson for the Canadian Securities Administrators, the umbrella group for provincial and territorial securities regulators, said via e-mail.
OBSI provides consumers with a chance at a fair hearing without the cost and time-commitment of going to court.
But OBSI can only recommend – not mandate – compensation to clients. A proposal to make its dispute resolutions binding has yet to be introduced in legislation in all provinces.
While OBSI’s complaints process is itself confidential, the organization reports systemic issues it discovers to securities regulators.
All in all, this setup is meant to help regulators assess and address some widespread problems even as plenty of client disputes are settled away from the public’s eye, Mr. Bureaud said.
Legislation governing companies' ability to insert gag clauses in standardized consumer contracts varies across Canada, with some provinces, like Quebec and New Brunswick, recently introducing rules that prohibit unfair consumer contracts.Sean Kilpatrick/The Canadian Press
But not all dealers and advisers are required to report complaints. Those that aren’t members of CIRO don’t have such an obligation. That group includes dealers that sell securities to certain wealthy investors.
“That’s a potential gap in the investor protection framework,” Mr. Bureaud said.
The CSA said dealers and advisers must document each complaint made to them about the products and services they offer and respond to them fairly.
Securities regulators can examine those records to ensure compliance or as part of an investigation.
Mr. Bureaud cautions against adopting the kind of strict limits or bans on NDAs that might be appropriate for cases of discrimination and sexual harassment in financial disputes, in which firms must report or log complaints with securities authorities and can’t prevent clients from turning to regulators.
“To import that ban into the context of settling a financial dispute, without taking into account the differences that exist, I think is not a good approach.”
Outside the financial industry, other regulators have told companies not to use NDAs to inhibit consumers from bringing complaints to independent bodies.
For example, the code of ethics of the Home Construction Regulatory Authority, Ontario’s regulator of new home builders and vendors, prohibits developers from threatening legal action against consumers for lodging a complaint.
But a report by the province’s Auditor-General last year highlighted serious issues with the regulators’ lax enforcement of its own rules. The research, for example, found that the HCRA automatically approved licence renewal applications by builders that had a history of misconduct, such as breaching contracts, harassment and verbal abuse.
HCRA chief executive officer Wendy Moir said via e-mail the organization has since eliminated its fast-track licence renewal stream and is working toward implementing more of the Auditor-General’s recommendations. Ms. Moir also cited one case in which it fined a builder $10,000 and required the firm to complete education courses after the developer threatened legal action against a homebuyer for submitting a complaint.
Professor Macfarlane is skeptical of relying mostly on regulators to detect systemic wrongdoing. Legislation that reins in the use of NDAs and allows consumers to speak publicly about defective products and subpar services is a more straightforward way to ensure that problems bubble up to the surface, she said.
She also challenges the notion that confidentiality clauses incentivize companies to reach settlements or offer larger reparation amounts.
Reports of decades of sexual misconduct by Harvey Weinstein was the primary catalyst for the global #MeToo movement, which in part exposed the widespread use of NDAs to silence victims and protect perpetrators.KIM HONG-JI/Reuters
A 2025 study published in the University of Chicago Law Review looked at the impact of California legislation adopted in the wake of the Harvey Weinstein scandal that limits secrecy around sexual harassment and workplace discrimination claims filed in civil court or with an administrative agency.
The researchers found the laws had almost no impact on the volume of case filings, and didn’t significantly prolong or complicate settlements. The new rules also didn’t seem to result in lower payouts, they wrote.
In the U.S., a federal law dating back to 2016 prevents companies from inserting gag clauses in standardized contracts that prevent consumers from sharing negative reviews. In Canada, Alberta’s Consumer Protection Act has a similar provision. British Columbia and Ontario have also adopted comparable rules, though those rules have yet to come into effect.
Quebec and, more recently, New Brunswick have introduced rules that explicitly prohibit unfair consumer contracts. And in general, common law principles establish that contracts cannot be exploitative, one-sided or otherwise “unconscionable,” said Prof. Macfarlane.
In practice, though, once a consumer has signed a contract that limits disclosure, it is nearly impossible to legally challenge those terms because courts typically assume that customers have agreed to them freely, she added.
There is little recognition that “some people are much more vulnerable and others far more powerful when it comes to making a ‘voluntary’ contract,” she said via e-mail.
To effectively rein in the use of gag clauses, regulators should make it an offence for companies to refuse to remove non-disclosure or non-disparagement clauses that don’t comply with consumer protection laws, she said.
Julie Macfarlane, distinguished professor emerita at the University of Windsor and the co-founder of advocacy group Can’t Buy My Silence.Supplied
Can’t Buy My Silence, the advocacy co-founded by Prof. Macfarlane, encourages consumers weighing whether to sign an NDA to take time to review the agreement with a lawyer. They should also know that secrecy clauses can be negotiated, including terms such as the length of the confidentiality period and what information even qualifies as confidential.
Any claims that refusing to sign will automatically lead to legal action don’t have merit, the organization says. Businesses are generally eager to avoid going to court, where the issue will no longer remain confidential.
In his legal practice, Mr. Geller has seen plenty of cases in which companies have used NDAs to cover up systemic problems.
He has also seen confidentiality clauses protect his clients by preventing them from venting publicly about firms that had wronged them in ways that would have constituted defamation.
Still, Mr. Geller sees plenty of scope for curtailing the ever-expanding ways in which he says companies are using clauses that bind consumers to secrecy.
He said Canada urgently needs its regulators to take a hard look at the practice.
“Without a public debate, about the fairness, the public interest, the permissible parameters for NDAs, it’s a no go, as far as I’m concerned,” he said.
Editor’s note: A previous version of this article incorrectly referred to the YWCA as the YMCA on second and third reference. This version has been corrected.
The Decibel: Where your money ends up after a scam
Once scammers successfully steal someone’s money, they need a place to stash it. So they are buying verified Canadian bank accounts in order to launder money. In the past 12 months, a Canadian cybercrime research firm identified 4,337 social media posts that offered to purchase accounts.
Alexandra Posadzki, The Globe’s financial and cybercrime reporter, explains what exactly is happening with this black market for verified bank accounts and why the demand for money mules seems to be growing.