I received notice of an Israeli class action about bank fees on my account. Am I included if I live in the United States?

A notice arrives in Hebrew from an Israeli bank, or a client in Florida finds one published in an Israeli newspaper he does not read, announcing that a court has certified a class action over conversion commissions charged on incoming foreign currency transfers. He has been sending dollars into that account for eleven years. The question he asks is whether he needs to do anything. The answer is that doing nothing is itself a decision, and it is usually the right one, but not always.

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Detailed Answer

Israel runs an opt-out system. Once the court certifies a class action under the Class Actions Law 5766-2006, it defines the group in its decision under Section 10, and everyone inside that definition is a claimant whether or not they know it. Section 11 gives a member 45 days from publication of the certification decision to tell the court they do not wish to be included, or such longer period as the court fixes. Stay in and Section 24 makes the eventual judgment or approved settlement res judicata for you, which means the claim against the bank over that fee is closed and cannot be run again individually. Nothing in the law limits membership to residents or citizens: the group is defined by the banking relationship, not by where the customer sleeps. Claims of this kind are permitted because item 3 of the Second Schedule allows a class action against a banking corporation in connection with a matter between it and a customer, whether or not they entered into a transaction, and the substantive argument usually rests on the Banking (Service to Customer) (Fees) Rules 5768-2008, under which a bank may charge only fees appearing in the published schedule supervised by the Supervisor of Banks at the Bank of Israel. A fee outside the schedule, or above it, is unlawfully collected money.

Where non-residents lose out is at the payment stage rather than the legal stage. Israeli settlements are commonly implemented by crediting the accounts of current customers, because that costs the bank nothing to administer. If your Israeli account was closed when the estate was distributed, or has been dormant since you moved the money to the United States, there is nobody to credit, and the settlement will usually contain a claims procedure with its own deadline that goes unnoticed abroad. Read the settlement terms rather than the press release, and write to the class counsel with your account details and dates. Where individual distribution proves impractical, Section 20(c) lets the court direct the money to a public purpose instead, which is the outcome that quietly absorbs most unclaimed non-resident entitlements. Two American points are worth holding on to. Opting out to sue separately over a few hundred dollars of commissions makes no economic sense, and a US court asked to hear the same claim against an Israeli bank would meet both the Israeli judgment and a jurisdictional problem. And the refund itself is a return of an overcharge rather than income, but it lands in a foreign account that still has to be reported: an aggregate of over USD 10,000 across foreign accounts triggers FBAR on FinCEN Form 114, quite apart from any Form 8938 obligation. The mechanics of getting the money out afterwards are the ordinary ones we describe for international transfers out of Israel.

In Practice: Section 11 of the Class Actions Law 5766-2006 gives 45 days from publication of the certification decision to opt out, and Section 24 binds everyone who does not. The claim itself is permitted by item 3 of the Second Schedule, and the usual substantive hook is the Banking (Service to Customer) (Fees) Rules 5768-2008 enforced by the Supervisor of Banks at the Bank of Israel. Realistic timing from certification to payment is two to four years, individual recoveries in fee cases are often NIS 100 to NIS 900, and the representative plaintiff's award under Section 22 is decided separately by the court.

When to Consult a Lawyer

• Your own loss is large enough to stand alone, for example a disputed commission on a seven-figure inheritance transfer. That is the one situation where the 45-day opt-out window is worth using, and it closes quickly.
• The account was held by a deceased relative and the estate has been distributed. Who is entitled to the refund, and who can sign for it, is a succession question the bank will not resolve on its own.
• You are being asked to sign a release or a settlement acknowledgement that goes beyond the fee in dispute. Israeli banks sometimes attach broader wording, and a signature from abroad is hard to unwind.

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Speak With an Israeli Attorney

We check whether a closed or dormant account falls inside a certified group, file the claim under the settlement's own procedure before its deadline passes, and advise on the rare case where opting out and suing separately is worth doing.

Contact us for a confidential initial consultation.