Attorney General Appeals Approval of Hot Mobile Class Settlement

Attorney General Gali Baharav-Miara has appealed to the Supreme Court against a class-action settlement approved in a case against Hot Mobile. The lawsuit alleges that Hot Mobile charged customers a monthly fee for a cybersecurity service without properly informing them that the service was free only for the first two months and then became a paid recurring add-on.

Under the settlement, Hot Mobile would provide benefits worth at least 50% of the disputed charges, calculated against total collections of about NIS 9.5 million. The company also agreed to inform subscribers about the fee and their ability to remove it later, and to refresh sales procedures for its representatives. Compensation would be provided through vouchers and service benefits, including a NIS 50 coupon for Hot products, expanded data packages, or an international calling package worth NIS 50.

Baharav-Miara had opposed the deal in the district court, arguing that the settlement coefficient was too low and that compensation in the form of benefits, rather than cash, was inadequate. The district court nonetheless approved the agreement, ruling that the 50% settlement factor was reasonable in light of the litigation risks, that class members could choose more than one benefit, and that cash compensation would not be practical or efficient in this case.

In the appeal, the Attorney General says the future compliance plan does not solve the problem and still allows unlawful collection to continue. The filing argues that approving a settlement that endorses conduct contrary to law has broad consequences, and that it effectively permits Hot Mobile to disregard the licensing requirement for explicit written consent. It also warns that such arrangements may encourage businesses to violate the law and then sanitize the conduct through settlements. The appeal further says coupon-based compensation risks becoming a marketing tool for the defendant and does not fulfill the purpose of a class action because of likely low redemption rates, undercompensation, and lack of transparency. Hot Mobile did not respond.