Supervisor of Banks Dr. Hedva Ber said that, “This is another step in the Banking Supervision Department’s efforts to benefit customers. From now on, customers with restricted accounts will be able to view detailed personal information regarding the restriction, obtain information clearly, rapidly and easily regarding their rights and obligations and the ways to cancel the restriction, automatically issue confirmation of their status, and more. Customers with accounts that are not restricted will be able to obtain confirmation of that as well.”
According to the law, the following entities may impose a restriction on bank accounts and customers:
- The Banks:
Restriction on bank accounts and customers, due to insufficient coverage for checks they have issued.
- Nonbank entities:
o The Enforcement and Collections Authority (including the Debt Execution Office and the Center for Collecting Fines, Levies and Charges) and the Official Receiver, due to nonpayment of debts to those entities.
o The Rabbinic courts may impose a restriction on recalcitrant husbands.
Roughly 85 percent of restrictions on customers of the banking system are imposed by nonbank entities. In other words, there are currently about 460,000 restricted accounts belonging to about 266,000 customers. Of those, about 232,000 accounts have been restricted by nonbank entities, and about 34,000 accounts have been restricted pursuant to the law by the banks.
The Banking Supervision Department is acting to assist restricted customers at various stages: at the preventative stage, to reduce the number of restrictions, and to assist customers in planning out their steps accordingly and to avoid actual restrictions; at the stage of the restriction itself, to help the public obtain relevant information regarding the restriction; and at the stage following the restriction, with the aim of helping them recover financially.
1. Preventive activity: The Banking Supervision Department has instructed the banks to send their customers with an increased risk of having their account restricted (if five checks are returned due to insufficient coverage) warnings by SMS. (This came into force on April 1, 2017.)
2. Improved service to restricted customers: Assisting customers whose accounts have been restricted by establishing a special website with personal identification for restricted customers as detailed below. Increased immediate warnings to customers, so that they receive an SMS from the bank where the restriction is imposed, around the time the restriction is imposed. (This came into force on July 1, 2017.)
3. Support in getting back on track once the restriction period has ended: Pursuant to Directive 430, which will come into force on March 25, 2018, information received by the banks from the Bank of Israel regarding any restrictions will not be allowed to be kept once the restriction is over. In addition, it will not be allowed to make any use of such information during the restriction period. For instance, it will not be possible to issue a credit rating for a customer based solely on this information.
The new Internet service will help customers of all banks, whether they have been restricted or not, to access personal statements containing information on restricted accounts, from any device at any time through a simple and quick personal identification. The system will show the customer the details of the entity that imposed the restriction (commercial banks, Debt Execution, the Center for Collecting Fines, the Official Receiver, or the Rabbinic courts), and details of the accounts in which 10 checks have been returned (if the restriction is due to checks without cover), or the identity of the entity that imposed the restriction and the file number regarding which it was imposed. In addition, all accounts affected by the restriction will be listed.
The customer will have access to detailed and relevant personal information concerning the restriction of his account, rights and obligations concerning the opening of an account, how to submit an appeal of the restriction, contact information, and the entities he can approach according to his status. The website will also enable the printing of an automatic confirmation of the restriction status so that it can be presented to third parties, a FAQ page, a detailed guide on restrictions, reference to relevant laws and directives, a computerized form for contacting the Restricted Accounts Section at the Bank of Israel, and more.
In order to protect the privacy of the customer and the information, service at this stage will be provided only to individual customers. Companies will, of course, be able to continue approaching the Restricted Accounts Section through any of the existing channels.
The website for restricted customers and accounts (in Hebrew only) can be accessed at https://www.boi.org.il/hagbalot