Israeli Consumers Largely Left Unprotected as Online Fraud and Retail Violations Surge

A sharp State Comptroller report by Matanyahu Englman says Israeli consumers are increasingly exposed to fraud, poor retail practices, and weak enforcement. The report says online scams have risen 86%, and in 2024 alone the Consumer Protection and Fair Trade Authority and the Consumer Council received tens of thousands of complaints, more than 11,000 of them about online fraud and scams.

The report says consumers in Israel have far weaker protections than buyers using international payment systems or PayPal, where they can get full protection if the product delivered differs from what was ordered. Bank of Israel and the Justice Ministry failed to extend those safeguards to local transactions, and the Bank of Israel’s own guidance on compensation for failed consideration is so limited that it sends users to the private nonprofit “Kol Zchut.”

Englman also found widespread violations in physical retail. In more than one-third of the supermarket branches inspected, prices were not marked as required, and in 79% of inspections of imported agricultural produce there were violations in labeling the country of origin for fruits and vegetables. The report comes as the Competition Authority has taken food industry executives to court in the so-called “signals trial,” including Viktor y CEO Eyal Rabid, Yohananoff CEO Itan Yohananoff, and Super Bareket CEO Efraim Teshuva. In one recorded conversation, Rabid was heard saying, “I do not want to sell an item for 7 shekels if I can sell an item for 10.”

The comptroller says enforcement bodies have been weakened by budget cuts and staffing shortages. The Consumer Protection Authority cut its proceedings against online commerce sites from 46 to 13, supervises only 12 sectors out of 146 under its responsibility, and collects only 22% of the fines and administrative penalties it imposes. The Consumer Council, after a roughly 25% budget cut, is without a CEO, without a deputy CEO, without a sufficient board, and with half its posts unfilled; average complaint handling time rose in 2025 to 135 days. Englman warns that without stronger powers and funding, consumers who are cheated on Israeli shopping sites are unlikely to get their money back.