Bank Hapoalim Agrees to 6.7 Million Shekel Class-Action Settlement

Bank Hapoalim has agreed to pay 6.7 million shekels as part of a settlement agreement in a class-action lawsuit concerning the adjustment of interest rates on deposits following partial withdrawals. The request for approval of the settlement was submitted to the Tel Aviv District Court in late June, following a class action filed in November 2022.

According to the plaintiffs, when a customer made a partial withdrawal from a variable-interest deposit based on the prime rate, the bank reduced the interest rate paid on the remaining balance by altering the spread from the prime rate. The plaintiffs claimed this was done unlawfully and without adequate disclosure to customers. Bank Hapoalim rejected the allegations, arguing that the interest adjustment mechanism is part of the contractual agreements with customers and that relevant information was provided to them.

The settlement applies to customers who made a partial withdrawal from a daily-interest deposit or a variable-interest deposit based on the prime rate between November 2017 and November 2022, resulting in a reduced interest rate on the remaining deposit balance. Under the agreement, every eligible customer will receive a refund calculated from the amount of interest withheld from them.

For active accounts, compensation will be transferred directly to the account within 60 days of the settlement receiving final court approval. For inactive accounts, the bank will attempt to locate the customers. In addition to past compensation, the bank has committed to changing its future procedures, requiring active customer consent for interest changes on daily-interest deposits.