How do I complain about an Israeli bank from abroad, and can anyone actually force the bank to fix it?

Most non-residents who write to us about an Israeli bank have already sent four emails to a branch manager and had nothing back. That is the wrong address. Israeli banking law gives you a defined two-step escalation with a hard deadline attached to the first step, and it works from a foreign address, in writing, without you setting foot in the country. What it does not do is pay you compensation, and understanding that distinction early saves people a lot of wasted months.

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Detailed Answer

Step one is the bank's own ombudsman. Every Israeli banking corporation is required to appoint a public enquiries representative under Proper Conduct of Banking Business Directive 308A, issued by the Supervisor of Banks, and that officer must reply to a customer complaint within 45 days of receiving it. The Directive allows an extension of a further 15 days in difficult cases, to a maximum of 60, and the ombudsman has to tell you in writing if the extension is being taken. Step two is the Public Enquiries Unit of the Banking Supervision Department at the Bank of Israel, and its power comes from Section 16 of the Banking (Service to Customer) Law 5741-1981. Section 16(a) obliges the Supervisor to investigate public enquiries about dealings with banks where they appear to have substance, using the investigatory powers of the Banking Ordinance 1941. Section 16(b) is the operative part: where the Supervisor finds the complaint justified, notice goes to both you and the bank setting out the findings and the manner in which the defect is to be rectified. A bank that then fails to correct the deficiency exposes itself to a financial sanction of NIS 250,000 under Section 11A(a), and the heavier tiers in Sections 11A(b) and 11A(c) run to NIS 750,000 and NIS 1,500,000 for other breaches. Under Section 12(a)(2) the Supervisor may also accept a written undertaking from the bank to compensate the customer, though that is a negotiated outcome rather than something you can demand.

Read Section 16(d) before you rely on any of this. It says plainly that the Supervisor's decisions grant the complainant no right or relief in a court that he did not have before, and that submitting a complaint does not extend any limitation period fixed by law. That second limb catches non-residents regularly. A dispute over a fee, a frozen transfer or a refused account sits in the ordinary seven-year limitation window under the Prescription Law 5718-1958, and the months your file spends with the ombudsman and then with the Supervisor are burning that window, not pausing it. Two provisions of the same Law are worth knowing about because they describe what non-residents actually complain of. Section 2(a) forbids a bank to refuse unreasonably to take a deposit or to open and keep a current account in credit, and Section 2(b) treats the attachment of unreasonable conditions as a refusal, which is the answer to a branch that says yes in principle and then asks for documents nobody could produce. Section 4 prohibits a bank from exploiting a customer's inexperience or unfamiliarity with a language to bring about a transaction on unreasonable terms, which is written almost as though the drafters had a foreign account holder in mind. Where you want money rather than a finding, Section 15 is the route: damage caused by an offence under the Law is treated as damage claimable under the Civil Wrongs Ordinance, and that claim goes to the Israeli courts on its own footing. Practically, the complaint file works from abroad because the Unit takes written submissions and charges nothing, no representation is required, and its telephone line on 02 655 2680 answers during Israeli business hours if the matter is urgent enough to skip the wait at the bank. Correspondence is conducted in Hebrew, so budget for translation of your account statements and the bank's replies, and give a foreign address plus an email that the Unit can actually reach. If the underlying problem is that the account was never properly opened in the first place, our guide on opening an Israeli bank account as a non-resident sets out the documentation the branch is entitled to ask for and the point at which its demands become the unreasonable conditions Section 2(b) is aimed at.

In Practice: Exhaust the bank's own ombudsman first, who must reply within 45 days under Proper Conduct of Banking Business Directive 308A (extendable by 15 days, to 60, on written notice). Then file with the Public Enquiries Unit of the Banking Supervision Department at the Bank of Israel under Section 16(a) of the Banking (Service to Customer) Law 5741-1981; a finding under Section 16(b) directs the bank how to rectify the defect, and a bank that ignores it faces a financial sanction of NIS 250,000 under Section 11A(a). The service is free and needs no representation. Section 16(d)(2) means the seven-year limitation clock keeps running throughout, so file any court claim in parallel rather than after.

When to Consult a Lawyer

• The bank has closed or frozen an account holding real money. A Section 16 finding takes months and produces no order to release funds; an application to the Israeli courts alongside the complaint is what actually moves the balance, and the two can run together.
• Your loss is quantifiable and material. The Supervisor does not award damages, so a fee overcharge, a wrongly executed transfer or a lost exchange rate has to be pursued as a civil wrong under Section 15, and the seven-year limitation period is not suspended while you wait for a finding.
• The complaint concerns an account of a deceased relative or a company you control from abroad. The Unit will engage only with a person it accepts as the customer, so standing has to be established first through a succession order, a properly authenticated power of attorney or company documents, and a complaint filed by the wrong person is simply closed.

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Speak With an Israeli Attorney

We prepare the ombudsman submission and the Section 16 complaint in Hebrew, keep the parallel civil claim alive so the limitation period does not run out behind you, and deal with the bank on the account itself.

Contact us for a confidential initial consultation.