Bank Hapoalim to Distribute NIS 6.7 Million in Settlement

Bank Hapoalim has agreed to pay 6.7 million shekels to customers as part of a class-action lawsuit settlement. The agreement, announced on Tuesday, October 6, resolves a multi-year dispute over the terms of interest accrual on deposits. The plaintiffs alleged that the bank reduced the yield on the remaining balance of variable-interest accounts when funds were partially withdrawn, a practice they claimed violated the law and was not adequately explained to customers. The bank denied the accusations, stating that its interest rate adjustment procedures were outlined in customer agreements and that necessary information was provided. The settlement will cover customers who partially withdrew funds from accounts with daily interest accrual or prime-rate linked floating deposits between November 2017 and November 2022, and whose remaining balance subsequently saw a reduced interest rate. The compensation amount for each customer will be based on the difference in interest not accrued after the partial withdrawal, set at 37.7% of that amount for daily interest accounts and a similar calculation for prime-rate linked deposits. Customers with active accounts will receive the funds automatically within 60 days of the court's approval of the settlement. For closed accounts, the bank will attempt to locate former customers. In addition to the compensation, Bank Hapoalim has committed to changing its procedures for such deposits, requiring explicit customer confirmation for modifications to terms upon partial withdrawal from accounts with daily interest accrual.