Due to the clarification of the public’s complaint received by the Banking Supervision Department in 2019, which dealt with restructuring a customer’s debt to the bank, it arose that within the framework of the collection procedures, the bank charged a total of NIS 147 in respect of a letter that was essentially a warning letter. Such collection is in contrast to the Order established by the Governor[1], within the framework of which it was instructed that the maximum amount of a fee that the banks may collect for the service of a warning letter is up to NIS 5 per notice or warning.


Findings of the clarification indicated that said collection was carried out by the bank from the date the Supervision Order went into effect in July 2015 until January 2016.


The Banking Supervision Department’s stance, which was submitted to the bank, is that under the circumstances being discussed, in which the letter was sent automatically based on general criteria, and without an individualized checking process with regard to the customer, the signature of a lawyer is not sufficient to justify the classification of the service as “Warning letter from a lawyer”. The fee that can be charged in respect of the “Warning letter from a lawyer” service has to reflect the work of the lawyer, including checking the specific debt before the collection, and not just the lawyer’s signature. The bank’s conduct negates the rationale at the basis of establishing two different services in the Fees Rules, and the purpose of the Supervisory Order, which were intended to create a balance between the bank’s operating expenses in respect of issuing and sending the notice, and the amount of the fee charged to the customer for such service.


In view of the above, the Banking Supervision Department found that the bank acted in contrast to the Banking Order, and imposed on the bank a financial sanction, in accordance with Section 11a(c)(5) of the Banking Law, totaling NIS 975,000. This amount is after a 35 percent reduction, in view of the bank having stopped the violation in 2016 already and before the Banking Supervision Department contacted it regarding that issue, in accordance with Section 1(2)(a) of the Reduction Rules.[2]


In addition, at this time the bank is working to credit all the customers from whom it overcharged the fee, in addition to interest and linkage.


Supervisor of Banks Mr. Yair Avidan said, “The Banking Supervision Department attributes considerable importance to the fairness of the relationship between banks and their customers. A notable emphasis is placed on consumer aspects that grant protections to customers and in particular when charging fees to customers going through economic difficulties. The Banking Supervision Department intends to continue and act to enforce the directives that apply to the issue”.

[1] Banking (Service to Customer)(Supervision of notification or warning service) Order, 5775-2015.

[2] Banking (Service to Customer)(Maximum rates of reduction of financial sanction amounts) Rules, 5771-2011: https://www.nevo.co.il/law_html/law01/500_515.htm​