Bank of Israel - Press Releases - The Banking Supervision Department demands that Bank Hapoalim compensate customers who were affected by a defect found in the bank's automatic cash withdrawal machines, and imposed a monetary sanction on the bank
Central bank: boi | Type: statement | Date: 2019-05-16

The Banking Supervision
Department's investigation showed that most of the withdrawal transactions were
in order, and that when a withdrawal failed, the bank's systems automatically
credited the customers in most cases. 
However, in cases where there was a breakdown, the bank did not notify
the customers, did not initiate action to find the customers who did not
receive an automatic credit, and did not make sure to refund the full amount
and the fees that were collected for the service that was not actually
provided. In the instances of failure that were identified, it was found that
the bank's actions were not consistent with Proper Conduct of Banking Business
Directive 433 (Erroneous Entry in a Customer's Account), or with Section 9(j)
of the Banking Law (Service to the Customer), 5741–1981, which deals with the
collection of fees.
In view of the findings of the
investigation, the Banking Supervision Department instructed Bank Hapoalim to
find all the customers who did not receive their money at the time of the
withdrawal, over the past seven years. 
Bank Hapoalim is working at this time to refund the full amounts and
fees that were collected from its customers and from customers of other banks
who were affected, and it has reported to the Banking Supervision Department
that a large number of the customers have already been credited, and that it is
continuing to act in order to credit the remaining customers.
The bank has taken actions with
the aim of minimizing the breakdowns in cash withdrawal machines and the
potential effects for customers as much as possible, and the Banking
Supervision Department is of the impression that the breakdown has been
repaired.  In addition, the bank took
actions to provide a service response to the customers, including extending the
hours of the dedicated telephone call center for technical support.  When the process of finding the customers and
refunding the money is completed, the bank will be required to publish data
regarding the scope of the breakdown and the amounts that were refunded.
In addition to the requirement to
refund the customers' money, and due to the stated breaches, the Banking
Supervision Department imposed a monetary sanction on Bank Hapoalim in respect
of the breach of Proper Conduct of Banking Business Directive 433, and in
respect of the breach of Section 9(j) of the Banking Law (Service to the
Customer) totaling NIS 1,575,000.  The
amount was determined after a 10 percent deduction from the maximum amount that
can be charged against these breaches in accordance with the reduction rules
set forth in the law.  The decision to
reduce the amount of the monetary sanction was based on the Banking Supervision
Department's impression regarding the numerous and effective actions taken by
the bank to correct the defects and prevent their recurrence.
At the same time, the Banking
Supervision Department opened an investigation into the entire banking system
regarding how the other banks handle breakdowns of their automatic machines.
Supervisor of Banks Dr. Hedva Ber
said, "As in any business environment, the banking system also contains
operational risks, and breakdowns cannot be completely prevented.  However, the supervisory expectation is that
the banking system, its employees and its control mechanisms will operate
constantly to find these breakdowns in real time, and that should a breakdown
occur, the bank will initiate action to credit the customers and derive lessons
for improving the service."
Customers who unsuccessfully
tried to withdraw cash from Bank Hapoalim's automatic machines and were not
credited are invited to contact the bank's dedicated call center at 03-567-3697
to investigate their claim.​