Approximately 16 percent more checks a month will be returned now that new regulations of the country's overdraft law have come into effect, according to a Dun & Bradstreet survey released Tuesday.
The study found that in the months leading up to the latest implementation of the law, which began on Sunday, an average of 152,000 checks worth a total of NIS 500 million were returned to customers who had gone too far over their credit limits.
Over the next few months, predicted economists at Dun & Bradstreet, the number of checks likely to be returned per month will rise by 20,000 to 30,000, worth some NIS 100m.
Yossi Sa'adon, spokesman of the Bank of Israel, said last week that according to details of the law, which took effect July 1, 2006, customers were informed by their banks that they were going to be automatically presented with new credit lines based on each customer's credit and account history, and that within one year, they must arrange a new credit limit for their account.
If they failed to do so by July 1, 2007, banks were to automatically limit customers with a NIS 1,000 credit line and any checks that would result in the account exceeding that amount would be returned without payment.
"This represents a unique opportunity for consumers as it presents them with the chance to increase their credit limit and avoid damage from the overdraft law," said Reuven Kouvent, the CEO of Dun & Bradstreet.