Israel Passes Law Mandating Sales Call Recordings to Protect Consumers from Fraud
The Israeli Knesset has passed a new law requiring certain businesses to record sales calls for products priced above 750 shekels, aiming to reduce fraud and protect vulnerable consumers. Initiated by MKs Iman Khatib-Yasin, Merav Cohen, and David Bitan, the legislation was approved after extensive consultation with government ministries and the Small Business Authority. It targets transactions such as loan brokerage, financial services, ongoing maintenance, and telemarketing calls by banks and insurance companies, with the law taking effect in March 2027.
Under the law, businesses must inform consumers at the start of calls that the conversation is recorded and provide the recording free of charge within 10 business days upon request. Recordings must be retained for two years if the transaction is completed, or six months if not. Failure to comply can result in fines up to 26,500 shekels for corporations and 14,750 shekels for individuals, with consumer claims accepted in civil proceedings if recordings are not provided.
The law also imposes privacy protection obligations under the Privacy Protection Law, requiring businesses to secure recorded data, obtain consent, and report breaches. The Privacy Authority has recently increased enforcement powers, including levying substantial fines, such as a 256,000-shekel penalty on a health fund for delayed breach reporting.
Small business groups have criticized the law, arguing it imposes heavy financial and operational burdens, especially on small and self-employed businesses that lack existing recording infrastructure. They warn these costs may be passed on to consumers and call for exemptions or legislative amendments. However, lawmakers and consumer protection officials maintain the law focuses on high-risk sectors and that the benefits of preventing consumer exploitation outweigh the costs. The Small Business Authority did not oppose the legislation, and estimates suggest implementation costs will be manageable, particularly as many companies already record calls.
MK Merav Cohen emphasized the law’s public interest in protecting vulnerable consumers from economic exploitation and aggressive marketing, noting that data security requirements primarily affect larger businesses. The Consumer Protection Authority also highlighted that the law applies mainly to telemarketing calls and businesses with a history of consumer harm, aiming to promote fair competition and transparency in the market.
