Certified as a class action, not yet decided on the meritsClass action

Bank guarantee issuance fee: class action certified against Mizrahi Tefahot

According to the bank's annual report, the court certified a class action against the bank on one fee, the fee for issuing a bank guarantee to individuals and small businesses, and rejected the motion regarding the other fees.

The details on this page are based on Mizrahi Tefahot Bank's annual report for 2018, in the note on contingent liabilities. We did not have the text of the decision itself, and the case number and the names of the parties do not appear in the report. This is a decision certifying the conduct of a class action, not a decision on the merits.

Background: class action over fees in "individual" and "small business" accounts at Mizrahi Tefahot

According to the report, in March 2015 a claim was filed against the bank in the Central District Court, together with a motion to certify it as a class action. The claim was of allegedly overcharging fees in "individual" and "small business" accounts, contrary to the Banking (Customer Service) (Fees) Rules, 5768-2008.

According to the plaintiff, the bank charged holders of such accounts fees for certain services at rates higher than the rates set in the fee schedule for large corporations. The plaintiff argued that he is unable to estimate the damage to the class members.

What the court decided on the bank guarantee issuance fee

According to the report, the bank's response was filed on June 30, 2015, and the Bank of Israel filed its position on December 15, 2015. The court recommended that the parties try to reach a settlement, and later an evidentiary hearing was held in July 2016 and summations were filed.

On January 31, 2018, the court certified the conduct of a class action regarding one fee only: the fee charged for issuing a bank guarantee. The motion regarding the other fees was rejected. Dates were set for filing a statement of claim and a statement of defense.

On January 6, 2019, the court approved a substitute representative plaintiff, at the applicant's request. On January 20, 2019, it approved the wording of the public notice on the certification of the class action, and the hearing of the claim was set for September 18, 2019. The report does not describe the further course of the proceeding.

What it means for Mizrahi Tefahot customers

According to the report, the certified proceeding concerns the fee for issuing a bank guarantee in "individual" and "small business" accounts. Certification of the class action is not a finding that the fee was charged unlawfully, and the outcome of the proceeding does not appear in the source.

Further proceedings on "small business" classification and fees appear on the page Leave to Appeal (Civil) 8674/19 Shefagat and on the class actions page.

Sources

Frequently asked questions about court rulings against Mizrahi Tefahot Bank

Was a class action certified against Mizrahi Tefahot over the bank guarantee fee?

Yes. According to the bank's annual report for 2018, on January 31, 2018 the Central District Court certified the conduct of a class action regarding the fee for issuing a bank guarantee, and rejected the motion regarding the other fees.

Which accounts did the claim concern?

According to the report, "individual" and "small business" accounts. It was alleged that the bank charged them fees at rates higher than those set in the fee schedule for large corporations.

Was it held that Mizrahi Tefahot charged the guarantee fee unlawfully?

No. The decision only certified the conduct of the claim as a class action. The report does not describe a decision on the merits.

The full text was not found openly online; details according to a report, not yet verified against the text of the decision

How to cite

Not stated in the source (fees class action in "individual" and "small business" accounts filed in March 2015), Central District Court, 31.01.2018. Source: Net HaMishpat (Israeli courts database), case Not stated in the source (fees class action in "individual" and "small business" accounts filed in March 2015).

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