Canadian Couple Recover NIS 14,230 From an Israeli Bank Class Action

Result: NIS 14,230 recovered under an approved Israeli class action settlement on a bank account closed three years earlier · Timeline: 7 months from first instruction to cleared funds in Canada · Challenge: Settlement paid by crediting live accounts only · Authority: Tel Aviv District Court and the Supervisor of Banks at the Bank of Israel · Financial Impact: NIS 14,230 recovered against NIS 5,400 in costs

Background

Our clients were a retired couple in their mid-seventies living in Vancouver. From 2009 until late 2022 the husband held an account in his sole name at an Israeli bank branch in Netanya, opened when they bought a two-room apartment near the seafront as a rental. Rent arrived from an Israeli agency, but the couple's own funds arrived from Canada, and the apartment was sold in June 2022 with the proceeds converted and wired out. The account was closed that November. They had not thought about it since.

In November 2025 a cousin in Ra'anana mentioned in passing that his bank had credited him a small sum described as compensation in a class action about foreign currency commissions. The couple asked us whether the same case had anything to do with them. It did. It had been certified sixteen months earlier, and they had never seen a word about it.

The Challenge

Israel runs an opt-out class action system, which meant the good news came first. Under the Class Actions Law 5766-2006 the court defines the group in its certification decision, and every person inside that definition is a claimant whether or not they know the case exists. The group here was defined by conduct rather than geography: customers who received incoming foreign currency transfers into shekel accounts at that bank between 2014 and 2022 and were charged a conversion commission exceeding the rate in the bank's published fee schedule. Nothing in the definition mentioned residence. Our clients were in, automatically, from the day of certification.

The bad news was structural, and it is the reason non-residents so rarely see a shekel out of these cases. Section 25 of the Class Actions Law requires publication of a notice to group members when a claim is certified, and publication in practice means Israeli newspapers, the online class actions register and a notice on the bank's own website. A Canadian customer who reads no Hebrew and closed his account in 2022 receives none of that. The 45-day window in Section 11 to opt out had expired long before they heard of the case, which mattered less than it sounds, because Section 24 makes the judgment binding on everyone who stayed in and their individual claim against the bank over those commissions was extinguished either way. Opting out would have been the wrong choice in any event.

The real obstacle sat in the settlement's implementation clause. The bank was to pay by crediting the accounts of customers whose accounts remained open, on a specified date, with no application required. Former customers were relegated to a claims procedure with its own evidential requirements and a hard closing date of 31 March 2026. Nobody had told our clients that procedure existed. Left alone, their entitlement would have joined the residue that Section 20(c) permits the court to direct to a public purpose where individual distribution proves impractical, which is where most unclaimed non-resident money in Israeli class actions quietly ends up.

In Practice: Under Section 11 of the Class Actions Law 5766-2006 a group member has 45 days from publication of the certification decision to opt out, and Section 24 binds everyone who does not. This settlement, approved by the Tel Aviv District Court at a headline value of NIS 24.5 million, was submitted under Section 18 and approved under Section 19 only after a court-appointed examiner reported on whether the compensation formula reflected the actual overcharge, a review that added 7 months between the parties' agreement and the approval order.

What We Did

The starting point was the file, not the bank. The class actions register maintained by the Courts Administration is public and searchable, and it produced the certification decision of July 2024, the settlement motion, the examiner's report and the approval order. Those documents defined the group, the compensation formula and the claims procedure. The press release the couple's cousin had seen defined none of it. Any non-resident who acts on the summary rather than the settlement text will misjudge both the entitlement and the deadline.

The formula compensated at a fixed percentage of the converted value on every qualifying incoming transfer during the group period, which meant the claim was an arithmetic exercise and the arithmetic needed eight years of records. The bank produced statements back to 2018 and no further, its retention practice stopping at seven years. For 2014 to 2017 we reconstructed from the Canadian side, using the couple's own bank's outgoing wire confirmations, each showing the value date, the amount sent and the Israeli beneficiary account. Forty-seven qualifying transfers were identified, ranging from CAD 2,400 to the largest of them, and the total converted value ran to roughly NIS 3.1 million once the 2022 sale proceeds were included. That volume is why this claim was worth running at all. Individual recoveries in Israeli bank fee cases usually land between NIS 100 and NIS 900, and no non-resident should spend money chasing one.

Identification was the second problem. A bank can credit a live account without asking who is behind it. Paying a closed-account holder abroad means satisfying anti-money-laundering identification for a person the bank no longer has on file. We supplied the husband's passport certified by a notary in British Columbia, an apostille from the province, a signature authentication before an Israeli notary at NIS 197 for the first signer once he had signed our power of attorney, and the closed account number with its opening and closing dates. The claim went in on 6 February 2026, seven weeks before the procedure closed.

Class counsel accepted the calculation in April 2026 with one adjustment, excluding three 2014 transfers that fell a few weeks outside the group period. The payment was made into our trust account in May 2026 rather than to a Canadian bank directly, because the settlement administrator, like most in Israel, does not remit abroad.

In Practice: The substantive claim rested on the Banking (Service to Customer) (Fees) Rules 5768-2008, under which an Israeli bank may charge only fees appearing in the schedule published under the supervision of the Supervisor of Banks at the Bank of Israel, so a conversion commission above the listed rate is money collected without authority. The excess here averaged about 0.4% of each converted amount, which produced NIS 12,400 of principal across 44 accepted transfers plus NIS 1,830 in index linkage and interest. Moving the money out of Israel then took the ordinary route: the bank required a Form 2513/2 self-declaration under Section 170 of the Income Tax Ordinance before releasing the outbound wire, which added 9 days.

The Outcome

NIS 14,230 reached Vancouver in June 2026, against costs of NIS 5,400 including the notarial and apostille steps. Seven months had passed since the couple first asked the question.

Two points shaped the advice afterwards. The refunded commission is the return of an overcharge rather than income, so the NIS 12,400 principal was not taxable in Canada, but the NIS 1,830 of linkage and interest was reported as foreign interest income on their T1 for 2026. And because the Israeli account had been closed since 2022 and the funds passed through a lawyer's trust account rather than being held abroad, no Form T1135 obligation arose, which would not have been the case had they kept the account open and left the money sitting in it above the CAD 100,000 threshold. The mechanics of the outbound transfer itself were the ones we set out in our guide to transferring inherited and other funds from Israel to Canada, and the position of a group member who is still deciding whether to act is covered in our answer on Israeli class actions over bank fees and non-resident account holders.

Key Takeaways

What this case illustrates for non-residents in similar situations:

1. Membership of an Israeli class action does not depend on where you live. Groups are defined by the banking relationship, and a Vancouver retiree who closed his account years ago sits inside the definition on exactly the same terms as a customer in Netanya.
2. Read the settlement, not the notice. The compensation formula, the evidential requirements and the closing date for former customers live in the approved settlement text on the public class actions register, and none of them appear in the bank's announcement.
3. Assume you will have to claim. Israeli settlements are usually implemented by crediting live accounts because that costs the bank nothing, and a closed or dormant non-resident account is invisible to that mechanism.
4. Do the arithmetic before you spend anything. A retail customer's share in a fee case is often NIS 100 to NIS 900 and is not worth a lawyer, while a non-resident who ran years of large incoming transfers can be an order of magnitude above the average, as this file was.
5. Reconstruct the years the bank has thrown away from your own side. Israeli banks retain statements for about seven years, and the outgoing wire confirmations held by your home bank prove the same transfers from the other end.

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Facing a Similar Situation?

If you held an Israeli account at any point in the last decade and it has since been closed, you may be inside a certified class action with a claims deadline running against you and no notice that reaches your address abroad.

Contact us for a confidential consultation about your Israeli legal matter.