Through fraudulent means and by presenting forged vouchers, approximately ILS 48,000 was withdrawn from a customer account at the Postal Bank. The Postal Bank refused to reimburse the funds, contending that they must await a police investigation, while simultaneously freezing the account-leaving the customers without their money and in prolonged uncertainty.
The Court accepted the claim due to the breach of banking duties of trust and care, the honoring of forged withdrawal vouchers without customer authorization, and the unjustified freezing of the account. Pursuant to the Israeli Bills of Exchange Ordinance, a forged signature is wholly devoid of legal effect and payment made thereunder constitutes an unauthorized act that precludes the right to debit the account. Case law teaches that a banking corporation is subject to heightened duties of trust and care toward its customers in safeguarding their funds and overseeing its agents. In the case at bar, the signatures were forged and the prolonged freezing of the account without presenting an established procedure and leaving the customers in prolonged uncertainty constituted a breach of banking fiduciary duties, warranting compensation for emotional distress.