Digital Bank One Zero Accuses Rivals of Unfair Customer Retention Tactics

Digital bank One Zero has filed a complaint with the Competition Authority, alleging that major banks are employing "predatory and illegitimate" practices to retain customers and stifle competition. According to One Zero, these banks are offering clients cash incentives to close accounts with the digital bank, as reported by The Marker. One Zero cited an example where Bank Leumi allegedly offered a customer 500 shekels to return, which would necessitate closing their One Zero account, plus an additional 2,100 shekels over three years for transferring their salary. One Zero claims these offers are part of packages designed to lock customers into their original bank for at least three years. The digital bank argues that these incentives are not offered broadly but specifically to customers who have already opened an account with a new bank and begun transferring their activity, effectively meaning most customers subsidize these deals for a minority. One Zero asserts that banks are not competing for customers seeking better terms but only react aggressively once a customer has chosen an alternative. The digital bank is urging the regulator to prohibit banks from rewarding customers for closing accounts at other institutions and to consider a broader ban on retaining customers who have opened new accounts for up to five years, or for accounts holding up to 15 billion shekels. Bank Leumi stated they have not received full details to verify the specific case but affirmed that their customer retention offers are legal and independent of the customer's destination bank. The Competition Authority confirmed the matter is in the preliminary stages of review.