Discount Bank to Refund NIS 1 Million for Overcharged Fees

Tel Aviv District Court Deputy President Rachel Barkai has approved a class-action settlement requiring Discount Bank to refund approximately NIS 950,000 to tens of thousands of mortgage holders. The settlement addresses claims that the bank illegally charged excessive fees during the early repayment of housing loans.

According to the lawsuit filed by Hagit Timsit, Discount Bank improperly charged a NIS 60 operational fee for each separate loan track within a single mortgage, such as fixed interest, prime, or foreign currency-linked rates. This practice, Timsit argued, resulted in illegal double-charging of customers.

Following a directive from the Supervisor of Banks, Discount Bank ceased this charging method in September 2021. The bank agreed to increase the refund amount for affected customers from 60% to 75% of the overcharged fees, plus interest and linkage differentials, after intervention from the Attorney General and a recommendation from the court.

The eligible group includes any customer charged an operational fee exceeding NIS 60 for early mortgage repayment between October 26, 2016, and September 2021. Active account holders will receive the funds directly within 90 days, while those who closed their accounts will receive a bank check by mail.

This settlement is considered a significant precedent in banking regulation, highlighting the importance of oversight on bank fee collection practices. It joins a series of recent class-action settlements against Israeli banks for similar overcharging issues. Customers unsure about their eligibility are advised to contact Discount Bank's service center, ensuring their contact details are up-to-date.