In a request for approval of a class action lawsuit filed with the Jerusalem District Court, it is alleged that Mizrahi-Tefahot Bank charged fees for securities transactions abroad, without publishing them in its tariff, and contrary to the law.
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According to the Channel 14 report, the fees were called "broker fees," and sometimes appeared only in retrospect, in unclear amounts - if at all.
When a customer purchases a share or security on a stock exchange abroad through the bank, the bank does not perform the transaction itself, but rather through a foreign broker. That broker charges a commission for performing the transaction, and the bank passes the cost on to the customer. This commission is called a "broker commission.".
According to Bank of Israel rules, even if it is an expense that is transferred to a third party, the bank is obligated to detail it in the tariff and present it to the customer in advance - which, according to the plaintiffs, did not actually happen.
The core of the claims focuses on accounts transferred from Union Bank, which merged into Mizrahi Tefahot at the end of 2022. According to the lawsuit, even after the merger, the bank continued to charge fees that were not properly disclosed, while impairing customers' ability to understand the full cost of the financial services they consume.
According to the lawsuit, in at least three different transactions, one of the customers was charged a "broker's fee" that did not appear in the tariff and was not disclosed to him in advance. He only discovered this in retrospect, and in only partial detail.
The lawsuit emphasizes that this is not an isolated case, but a systemic practice that could have affected thousands of customers over the years.
The Banking Law and Bank of Israel rules stipulate that even commissions paid to a third party – such as a foreign broker – must appear in the tariff in a transparent and clear manner. According to the plaintiffs, Mizrahi Tefahot Bank violated these provisions, thereby preventing customers from a basic ability to compare prices with other banks.
Mizrahi Tefahot Bank stated that their response will be provided as part of the legal process.
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