Numerous class actions were recently filed in Israel against foreign corporations highlighting a growing focus on consumers’ rights. These legal actions primarily address alleged violations of the rules regarding fixed-term transactions under the Israeli Consumer Protection Law. These cases relate to fixed-term transactions in which the consumer purchases a membership or subscription for a specified period, and the terms of the agreement include an automatic renewal (sometimes at a higher price).
A primary allegation is that companies automatically renew fixed-term transactions without obtaining explicit prior consent from consumers, a practice that plaintiffs argue violates the Consumer Protection Law. The Consumer Protection Law requires businesses to notify consumers in advance about the end of a fixed-term transaction and its terms, as well as the renewal of subscriptions, within the legally required period (30 to 60 days before the renewal date, including the price and terms of the renewed transaction). Businesses must obtain explicit prior consent for automatic renewals and ensure that cancellation mechanisms are accessible and transparent. Furthermore, businesses are obliged to promptly refund payments upon cancellation, subject to statutory conditions.
Additionally, plaintiffs assert that companies are not providing accessible and user-friendly mechanisms for canceling subscriptions. The imposition of excessive cancellation fees is another contentious issue, as it can deter consumers from exercising their right to terminate subscriptions.
Plaintiffs also allege that companies do not allow an “any time” cancellation and charge consumers subscription fees until the end of the fixed term, rather than for the respective period prior to cancellation only. Plaintiffs contend that the terms of engagement are a “uniform contract” and the provisions regarding renewal and cancellation are “depriving conditions” that should be voided.
Businesses facing these claims may rely on various defenses, both legal (as to the correct interpretation of the Consumer Protection Law) and factual (as to the way they meet their legal obligations under the law). Additionally, these class actions raise questions relating to service, jurisdiction and applicable law which may be especially relevant to companies that do not have a physical presence in Israel.
Our firm has extensive experience in handling consumer protection claims, providing tailored legal solutions to businesses facing such challenges, and effectively navigating the complexities of litigation.
For further information, please contact Ran Sprinzak or Tomer Weissman, our litigation department heads, or Hadas Bekel, our litigation partner class actions specialist.
+97237770100 
