Legal Updates

A bank that uses customer documents as an “example” for use by others infringes upon the customer’s right to privacy

May 15, 2024

A bank took documents given to it by customers, which included their personal details, for their private needs and used them by handing them over to other customers in order for them to be used as sample documents in the procedure of assigning apartments to all kibbutz members as part of the mortgage procedure.

The Court accepted the customers' claim and held that the bank has breached its duty to protect the privacy of its customers and must compensate them. Breach of privacy is, inter alia, "breach of the duty of confidentiality established by law regarding a person's private affairs" and/or "breach of the duty of confidentiality regarding a person's private affairs, stipulated in an express or implied agreement". Breach of privacy done in "good faith" may be subject to a defense if "It was done in the course of the tortfeasor's lawful occupation and in the course of its ordinary business, provided that it was not done through public publication”. Between the bank and its customers there is a historical institutional duty of confidentiality that stems from the special contractual relationship between them. Therefore, a bank who believes that providing one customer's information to another customer and/or transferring one customer's documents to another customer is part of its "lawful occupation and in the ordinary course of business" - one should keep his money and privacy away therefrom. In view of the breach of privacy, the bank will compensate its customers for each document that was distributed and includes personal and private details.