Charged for a service they did not request: Hot Mobile to pay 15 million shekels in compensation
The Tel Aviv District Court has approved a class action settlement against Hot Mobile, providing compensation to approximately 785,000 subscribers charged for an "international calls package" they did not request. Although the Attorney General opposed the settlement, the court approved it while staying execution pending a potential appeal.
“The settlement agreement reflects a proper, fair, and balanced solution to the lawsuit under the circumstances. The arrangement will avoid further litigation and provides a proper benefit for the group members,” the Tel Aviv District Court ruled regarding the settlement, which has been granted the force of a court judgment. The class action lawsuit alleged that Hot Mobile Ltd. charged customers for an “international calls package” that they had never requested.
The settlement brings an end to the proceedings regarding the certification motion. Hot Mobile maintains that its conduct did not constitute a breach of its obligations to consumers. According to the company, the group eligible for compensation includes 785,291 subscribers, and the total payout will amount to 40% of the allegedly unlawful charges. As of the signing date, this is estimated at approximately 15 million shekels (including VAT), plus linkage differentials and interest.
Under the agreement, customers may choose between a monetary refund or service benefits. The settlement applies to all Hot Mobile customers charged for the “international calls package” during the seven years preceding the filing of the motion and until the date the court judgment became final.
The Attorney General’s Appeal
The Attorney General filed an objection to the settlement in its proposed format, yet the court approved it. Her objections were multifaceted. One concern involved future regulation, which she argued allows for “implied consent” rather than explicit customer consent. She also opposed the structure of legal fee payments, suggesting they should be tied to the actual implementation of the settlement to incentivize compliance. Furthermore, she maintained that the cause of action was strong.
The court emphasized that as part of future regulations, Hot Mobile has refined its procedures for sales and service representatives, clarifying the importance of disclosing service details during sales calls and ensuring customers know the service can be canceled at any time. It was also determined that the company will send notifications to group members informing them that they are being charged for the service.
Additionally, the court ordered a stay of execution of the judgment pending a decision on any potential appeal, noting that there are two other pending proceedings relevant to this case, as identified by the Attorney General.
