Israeli Banks Threaten Ministry of Communications Over Financial Fraud
The Association of Banks threatens legal action against the Ministry of Communications over soaring financial fraud and telecom security loopholes, amid a 35% surge in phishing attacks.
A severe and unprecedented conflict has erupted between the Association of Banks and the Ministry of Communications over the handling of financial fraud, phishing, and mobile phone line hijacking. The Association of Banks sent a formal warning letter prior to taking legal action and filing a petition with the Supreme Court, claiming that the ministry ignored repeated requests and failed to use its powers to plug security loopholes in cellular networks.
According to data revealed by TheMarker, financial fraud causes hundreds of millions of shekels in damages annually to the public. Data from the Israel National Cyber Directorate for 2025 shows a 35% increase in public phishing attacks. Banks argue that loopholes in telecom companies' systems serve as the primary entry point for attackers, and call for stricter identity verification requirements during number porting and the establishment of information-sharing mechanisms.
Association of Banks CEO Eitan Madmon criticized the regulator, stating: "It seems that until now, the Ministry of Communications has viewed itself primarily as a guardian of the telecom companies' interests rather than the public interest." Conversely, the Ministry of Communications rejected the accusations, responding: "First and foremost, the responsibility for identifying the financial institutions' customers, verifying their identity, and approving transactions rests with the financial institutions."
This mutual shifting of responsibility between the financial system and the telecom regulator leaves the public exposed to digital threats enhanced by artificial intelligence tools. As long as both sides entrench themselves and fail to formulate a joint working mechanism, the legal battle in the Supreme Court will be decided judicially, setting the boundaries of responsibility for telecom companies and banks.
