Consumers unite against bank fees

Campaign launched to increase bargaining power opposite the banks.

bank leumi 298 88 aj (photo credit: Ariel Jerozolimski [file])
bank leumi 298 88 aj
(photo credit: Ariel Jerozolimski [file])
Public Trust, the consumer business group, has launched a public campaign to unite at least 100,000 consumers in an effort to force down the recent bank fee increases by the country's three largest lenders. "Our aim is to increase the bargaining power of consumers opposite the banks. This is the only way we can make a change. Regulation will not make a change but market power can," Galit Avishai, Director of Public Trust, told The Jerusalem Post. "Once we have about 100,000 consumers signed up for this cause we will turn to the banks to start the contest by passing our proposal to the banks." Avishai added that the proposal will be put together by a public committee comprised of former senior officials of the Finance Ministry, the Supervisor of Banks and insurance companies and others whose names will be made public next week. "Depending on the reaction to the proposal we receive from the banks, we may recommend to our group to switch banks," said Avishai. Since the beginning of this week, consumers disgruntled over the increase in bank fees have been able to sign up via the Public Trust's Internet site or via the telephone (03-5606069) to join the action. "We have 28 people working in our organization and the phone has not stopped ringing," Avishai said. By late afternoon on Thursday, 18,860 people had joined the initiative on the Public Trust's website. Against the domino effect of bank fee increases at Bank Leumi, Bank Hapoalim and Israel Discount Bank, the country's sixth largest bank Union Bank of Israel announced on Thursday that all fees charged to households will be frozen for six months. "Recent complaints point to the existence of an insufficient level of competition in the banking system", said Haim Freilichman, CEO of Union Bank. "We invite the same people to come to us to find out how much we can provide an alternative for them when it comes to services, products and the discounts we offer". On Wednesday, Yoav Lehman, the banking supervisor, asked the Ministry of Industry and Trade to impose controls on several fees including monthly charges for credit card use and fees for starting a loan. Currently, 14 fees are price controlled such as the printing of checks, depositing of checks, the cancellation of a standing bank order, the withdrawal of foreign currency in cash, and the transfer of securities between a customer's bank accounts. "We don't believe in the regulation of fees," said Avishai. "The regulator does not know how to determine fees in the modern world we live in. Only the market can."