Legal Updates

A bank exercising a foreclosure order wrongly on an account that was not part of the order will compensate for beach of privacy

September 3, 2020

Three employees resigned and commenced working for a competitor established by one of them, taking with them several clients, and continued working with such using information acquired during their employment.
The Office of Execution (of Court verdicts) issued an ex-parte foreclosure order (in a case that was later overturned on appeal and the “winner” had to returned funds collected through the Execution Office) which specifically set that it would not apply to current accounts and joint accounts. Notwithstanding the foregoing, Bank Leumi not only imposed the foreclosure on a joint current account but also provided details of the contents of the account to the Office of Execution and the winner in the case.
The Court held that the bank must compensate for beaching the right to privacy. The foreclosure order here was clear and a bank is not allowed to make a foreclosure and disclose information that is not explicitly required in a foreclosure order. In cases where a bank has a doubt as to the information it is required to disclose in response to a foreclosure order, the bank may apply for clarification to the Office of Execution or contact the account holder for clarification or in order to provide prior notice. Certainly, the bank was not allowed to detail the existence of a joint account to which the foreclosure order did not apply.
For full disclosure, the office of Afik & Co. represented the claimant in such proceedings.