The Tel Aviv District Court today approved a class-action suit against Bank Leumi (TASE:LUMI) on behalf of all customers who made fixed-term deposits via direct banking, and who were denied 1% in extra interest after the deposits were automatically renewed.
In June 2000, through attorney Adv. Yitzhak Aviram, bank customer David Sagiv filed a petition for a NIS 1 billion class-action suit against Bank Leumi for allegedly providing misleading information about the credit interest the bank paid on shekel deposits.
The petitioner alleges that Bank Leumi stops the extra interest during the deposit period, thereby lowering the return on the deposit, without notifying the customer or obtaining his consent. The petitioner alleges that this deception is carried out by means of misleading publications prior to the deposit, and by failure to notify afterwards.
The petitioner alleges that according to Bank Leumi publications, all fixed-term shekel deposits made by customers through direct banking earn the depositors a bonus or extra interest of 1% above the prevailing bank interest rate.
At some point the petitioner discovered to his astonishment that the extra interest was awarded only for the first deposit period, but was not paid when, in accordance with the customer's instructions, deposist were automatically renewed for subsequent, and tha this took place without it being brought to the customer's attention.
Judge Nissim Yeshaya noted in his decision that it was unacceptable that customers making deposits via this channel should forego the extra interest just so that the deposits could be automatically renewed.
Judge Yeshaya added that the petitioner proved that he suffered personal harm from the bank's deceit. He said the size of the group unquestionably justified handling the case as a class-action suit, since there tens of thousands of depositorsho use Bank Leumi direct banking service and are being misled.
Yeshaya nevertheless emphasized that the extent of the actual claim was far smaller than the amount claimed by the petitioner. The claimant will represent the relevant depositors for the period March 17, 1999 through September 18, 2000.
Published by Globes [online] - www.globes.co.il - on December 17, 2003