Israel Credit Card Company Agrees to Compensate Businesses in Settlement Deal

The Israel Credit Card Company (KAL) has reached a settlement agreement in a class-action lawsuit, leading to the direct compensation of eligible businesses. The settlement, approved today by the District Court in Tel Aviv, will see KAL pay approximately NIS 9.4 million in total.

The class-action lawsuit was filed against KAL in May 2018 by attorney Yaniv Stis from the Moshkowitz-Stis office. The lawsuit alleged that KAL had increased clearing fees for its clients without their knowledge. Additionally, it was claimed that clients were informed of the fee increases through ineffective notices, hidden within the charge detail page and lacking proper emphasis.

The class-action sought to represent all businesses that had contracted with KAL for clearing services over the previous seven years and were charged the clearing fee without adequate disclosure.

Following a mediation process, a compromise settlement was reached, applying to businesses that experienced clearing fee increases during specific dates: May 2014, January 2015, February 2016, and July 2017. The total compensation amount committed by KAL is approximately NIS 11.8 million, which includes direct compensation to the affected businesses, compensation to the applicants, fees to their representatives, and VAT. The direct compensation to the members of the group is estimated to be about NIS 9.4 million.

The actual amount received by each eligible business will vary, depending on various parameters, including the date of the fee increase. Active customers, those with an active account using KAL's settlement services, will receive a refund credited directly to their credit card. Inactive customers whose refund exceeds NIS 50 will receive a bank transfer to their bank accounts.

As part of the settlement, KAL has committed to making changes in future price increase notifications within 30 days of the court's final judgment. The changes will include an emphasis on the price increase message, increasing the size of the letters by at least 20%, and creating a clear separation between the commission increase message and other announcements. The content of the message will be reviewed to avoid ambiguous terms and will be accompanied by a title reading "Increase in the Clearing Fee." The body of the message will specify the exact fee increase and the effective date.

This settlement marks a significant step towards resolving the dispute between KAL and its affected clients and aims to ensure better transparency in future communications regarding fee changes.