Fighting back
 

There are several firms which specialize in

 representing clients Who believe their Bank

Has wronged them.

BY NIEIL COHEN
"JERUSALEM POST"
 

About a year ago a reader wrote to me and  described a problem he had had with one of the banks. So what’s new, you ask, that happens every day. The difference was that the sum involved was several hundred thousand shekels and the problem was partly, though not completely, related to the stock market collapse. But by the time the reader wrote back to me he had more or less settled the matter, so my advice was mostly irrelevant.

The settlement was, I thought, pretty unsatisfactory  both from   financial standpoint and because one of its conditions was that the whole affair be kept completely confidential. That is why I must be so vague here. I suggested that before the reader accepts the offer he at least consult a lawyer. But he was reluctant to incur the cost of taking legal advice and possibly embarking on litigation, particularly with an offer, albeit an unsatisfactory  one, in hand.

An Anglo-Saxon immigrant and no longer young ,the reader     

was basically afraid of taking on the establishment. He fell that the odds were stacked against him and that his situation might even get worse if he didn't "play along" I genuinely understood the reader's fears and frustration. To the average customer, the power of the banks is vast its upper management echelons largely inaccessible and unhearing. The Bank OF Israel's complaints process is also slow and faceless.
 

But there is help to be had though it will be appropriate only for those with fairly big problems.

There is an industry that deals with handling bank problems. Most of the their work is done for  larger, business clients ,but a number have done work for people who borrowed heavily to invest in stocks and mutual funds and wound up heavily   indebted to the banks. They do not discriminate by Type of client, but rather by whether the amount in question is worth their time.
 

The firms got their start in the hyperinflationary mid-eighties when the banks resorted to all kinds of Tricks to keep their profits growing. One notorious wheeze was forcing the client to take a loan on the 14th of the month and repay it on the 16th of the month when the loan was due, thereby giving the banks

 two  months of extra indexation. Then, the firms specialized in helping businesses check the bank (often suspect) math's and fight them, in court if necessary, to get money back and debts reduced. More  recently, they have advised many of the kibbutzim and moshavim which have claimed the banks have massively inflated their interest bills.
 

Other practices the banks have been known to engage in include crediting  clients positive balances with interest calculated on the basis of 365-day year (ie less interest per day) while   debiting negative

Balances based on a 360-day year (more interest per day); conditioning one service on another –  we'll give you a loan but only if you open a provident fund plan with us; failing to use security they hold to off-set a debt – continuing to charge high levels of interest on the out-standing balance.
 

For  the  customer  who feels he's been wronged these firms offer three important services. First, they have the wherewithal to check the bank's math's, which can be pretty complex and incomprehensible to the layman. Second, they have a direct into management levels of the bank so if you have a legitimate claim or grievance the bank will take it seriously. And third these guys have a good enough track record that the banks respect them. You may feel power-less against the banks, these guys aren't The banks don't push them around.
 

David Evron, managing director of BAKARA V’NIHUL (Management Financial Systems Ltd), says he does not generally take on clients who have borrowed less than NIS200,000 from a bank.
 

Given the complexity and labor intensity of the work it just doesn't pay to take on anything much smaller. After a preliminary evaluation BAKARA V'NIHUL asks its clients for an advance payment, which can run into several thousand shekels, and also takes a fee of 10-15% of the amount it saves its client. Other firms operating in the area .

This service clearly isn't for everyone. If you feel strongly that you have been ripped off by your bank for a smaller sum it might be worth taking up an hour of an accountant's time for him to check your assumptions and then complaining to the Bank of  israel if you can't get any satisfaction from your bank.