Audit Warns Israeli Consumers Are Left Exposed to Online Scams and Unchecked Pricing Abuse

A new State Comptroller report by Matanyahu Englman says Israeli consumers are increasingly unprotected, especially online, as watchdog agencies have been weakened by budget cuts and reduced powers. The article says that in 2024, tens of thousands of complaints were filed with the Consumer Protection Authority and the Consumers Council, including more than 11,000 about online fraud, a rise of about 86% in recent years.

The report says consumers buying through international platforms or PayPal get full protection if a delivered product differs from what was ordered, but the Bank of Israel and the Justice Ministry have failed to extend similar safeguards to domestic Israeli transactions. It also criticizes the Bank of Israel website for providing such sparse information on compensation rights that it directs users to the private nonprofit Yediot website, Kol Zchut.

Beyond e-commerce, the comptroller found price-signing violations in more than one-third of inspected branches of major supermarket chains, and origin-labeling violations in 79% of checks on imported agricultural produce. The Competition Authority has also taken food-industry executives to court in the so-called "signals trial," including Victori CEO Eyal Rabid, Yochananoff CEO Eitan Yochananoff, and Sufar Brakat CEO Efraim Teshuva, after recordings allegedly showed pricing coordination. In one recording, Rabid said, "I do not want to sell an item for 7 shekels if it is possible to sell an item for 10."

The report says the Consumer Protection Authority reduced proceedings against online retail sites from 46 to 13, while actively supervising only 12 sectors out of 146 under its remit. It also says the government pushed toward merging the Consumer Protection Authority with the Israeli Consumers Council, later advancing a cabinet decision to dissolve the council, but both bodies suffered budget cuts of about 25%. The council currently has no CEO, no deputy CEO, too few board members, and half its authorized jobs unfilled, which has pushed the average complaint-handling time in 2025 to 135 days. Even when fines are imposed, the authority collects only 22% of the money, which the report says has gutted deterrence.