Without derogating from the generality of the aforesaid, the following matters will be considered essential in the transaction:
(1) the nature, nature, quantity and type of asset or service;
[...]
(4) the use that can be made of the asset or service, the benefit that can be derived from it, and the risks involved therein [...]".
- Deception in the act is a false statement on a material detail, which there is a gap between it and reality. Deception by default is the failure to provide information on a material matter in the transaction, in a manner that may be misleading. Preventing deception is one of the main purposes of the law, and it is intended to ensure that the consumer has at his disposal complete and fair information so that he can plan his steps and enter into the transactions he desires in an informed manner.
- According to the language of the law, in order for deception to take place, two cumulative conditions are required: first, that the dealer acted in a manner that is "liable to mislead" a consumer, while as stated, the deception can be done actively, in deed, by creating a representation that does not correspond to reality, or passively, by omission, by refraining from providing information that is required to be provided. The second is that the deception was made in relation to a material matter of the transaction (see Civil Appeal Authority 2837-98 Arad v. Bezeq Israel Communications Company Ltd., IsrSC 55(1) 600 (2000), at pp. 608-609).
- Without derogating from the generality of the aforesaid, the legislature enumerates specific items that are material matters in the transaction. Among other things, the nature, nature, quantity and type of an asset or service; the use that can be made of the asset or service; the benefit that can be derived from them; and the risks involved in them.
- Against this background, we will examine the claims of deception in the application for certification in their order, in relation to each of the respondents.
The first cause of deception – the respondents do not present the rate of commission taken from the subscription fee and the lower rate of the subscription fee used to purchase lottery forms
- The Applicant claims that most of the subscription fees paid by the Respondents' customers are not used for the purchase of lottery forms at all. The Respondents bring to the customer's attention what the monthly subscription fees are, but do not disclose what percentage of the subscription fee used to purchase lottery tickets is and what remains with the Respondents as a commission. According to the Applicant, this is misleading.
- First, we will examine the claim on the factual level in relation to each of the respondents in respect of which it was raised (the claim is not made here against respondents 3 and 4) and then we will discuss the question of whether this is a deception prohibited by law.
Respondent 1 - Lutont
- On Respondent 1's website, as attached by the Applicant to the application for approval and without a contradictory version attached on behalf of the Respondent, the routes offered to customers by the Respondent are not detailed: their nature, terms or prices. The amount of the subscription fee used for the purchase of lottery tickets is not specified on the website, and the remaining fee in the hands of this Respondent is not specified.
- As part of the discovery of the documents, Respondent 1 attached its engagement documents with its customers. In this framework, documents detailing the routes offered by Respondent 1 to customers were attached, and the engagement agreement that it uses was attached.
- From these documents, it appears that Respondent 1 offers its customers four different tracks, each of which contains a mix of lotteries of different types, at different frequencies, to different scopes, with the participation of a group of participants of different sizes, and in the distribution of winnings at different rates. For example, the "Triple 14 Full" track includes participation in "Winner 7 Group" lotteries, with a scope of 7 lottery tables, in a group of 14 members, with 10% of the winnings transferred to Respondent 1 and 90% of the winnings divided equally among the members of the group, alongside participation in "Multi-Chance" lotteries in the scope of 174 lotteries per month, in a group of 40 members, with the winnings fully distributed among the members of the group, and alongside participation in the "777 Daily" lotteries in the scope of about 52 lotteries per month, in a group of 70 members, with the winnings fully distributed among the members of the group.
- Each of the four plans carries its own price tag, between NIS 159 and NIS 179 per month, with some plans requiring a commitment of at least one year and some offering no commitment.
- Even in the documents detailing the proposed tracks, as well as in the engagement agreement that was attached, it is not specified what is the rate of the subscription fee used to purchase lottery tickets, and what is the rate of the subscription fee that embodies a commission for the service offered by the Respondent to its customers.
- It was argued that in the course of preparing the application for approval, the Applicant was assisted by female investigators who had initiated telephone conversations with some of the Respondents. Such a conversation also took place between a researcher and a representative of Respondent 1. The Investigative Reporter tried to obtain an answer to the question of the share of the subscription money used to purchase lottery tickets, but was unable to obtain a satisfactory answer. The following are the exchanges in the conversation:
Researcher: [...] 159 subscription fees, everyone uses, you use all the money to buy the ticket? Because what do you get out of it?