Israeli Central Bank Criticizes Issuer Over Rates, Payments

The Bank of Israel has ordered Israel Credit Cards-Cal Ltd. to compensate customers who failed to receive proper information about relatively high interest rates and monthly repayments for credit cards, the country’s central bank says in a statement. The ruling applies primarily to customers who canceled or stopped using “Active” cards within six months of first use. Central bank officials say they issued the order after receiving complaints from the issuer’s customers. The issuer did not provide immediate comment. Active cards carry an average annual interest rate of 14.4%, the central bank says. Other cards typically carry lower rates, the bank says. Customers who failed to contact the issuer to negotiate card-repayment details were “subject to a minimum repayment determined by the company, and the remainder [would] be carried into the coming months at a high interest rate,” the central bank says in a statement. “Furthermore, the rate of interest charged on the credit cards was only brought to the attention of the customers at a later stage and only after they used the card for the first time.” According to the bank, the card company informed its customers about the interest rate only at the time of their first monthly statement and not before they used their cards. The central bank did not say how much customers will be compensated. The issuer must publish more information about interest rates, the amount of monthly repayments and dates of monthly payments, the central bank says.