Bank Hapoalim to Pay $1.8 Million in Class Action Settlement

Bank Hapoalim has agreed to pay 6.7 million shekels (approximately $1.8 million) to settle a class-action lawsuit concerning interest rates on deposits. The settlement, announced on Tuesday, October 6, resolves claims that the bank illegally reduced interest on remaining funds after partial withdrawals from accounts with variable or daily interest rates. The lawsuit, filed in November 2022, alleged that the bank manipulated indicators to lower the interest on the balance without sufficient disclosure to clients. Bank Hapoalim denied the allegations, stating that its interest rate adjustment mechanism was part of customer agreements and that all necessary information was provided. The settlement will apply to customers who partially withdrew funds from accounts with daily interest accrual or floating prime-rate-based accounts between November 2017 and November 2022, provided their remaining balance interest was reduced. Eligible customers will receive a refund calculated based on the difference in interest, amounting to 37.7% of the interest saved by the bank on daily interest accounts, and a similar calculation for prime-rate accounts. Those with active accounts will receive the compensation within 60 days of the court's approval of the settlement. The bank will also implement changes to its practices, requiring active confirmation from customers before altering terms upon partial withdrawal from daily interest accounts and providing more detailed disclosures about interest rate changes on remaining balances to prevent misunderstandings.