Wrong number: Are Israel’s phone companies systematically overcharging?
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Prominent among the victims: New immigrants and the elderly

Wrong number: Are Israel’s phone companies systematically overcharging?

Consumer groups report endless complaints from Israelis who say they are mischarged, lied to, pushed into debt, and even stopped at the airport for fees they never agreed to

Simona Weinglass is an investigative reporter at The Times of Israel.

Illustrative image (iStock)
Illustrative image (iStock)

In 1993, at the age of 24, Danish-born Rika Greenberg left Israel to move back to Denmark. But Greenberg, a teacher and communications professional who had immigrated to Israel as a child with her family, did not forget her Jewish and Israeli roots, She sent her two children, now aged 18 and 19, to Jewish day schools and to the Bnei Akiva youth movement. So effective was their Zionist upbringing that Greenberg’s 19-year-old daughter recently decided to immigrate to Israel and volunteer for the Israel Defense Forces. But when Rika went to the Israeli embassy in Copenhagen last February to renew her Israeli passport, she encountered an unwelcome surprise.

“The clerk looked in the computer system and said she can’t renew my passport, because there is an order prohibiting me from leaving Israel due to an unpaid bill to the telephone company Bezeq, from 1999,” she told The Times of Israel by phone recently from Copenhagen.

“If I travel to Israel, I won’t be allowed out of the country because I supposedly owe Bezeq NIS 16,000 ($4,500). But I did not even live in Israel in 1999, and I never had any contract with Bezeq.”

Rika Greenberg (left) and her children in Copenhagen, 2017 (Courtesy)

So began Greenberg’s Kafkaesque saga over several months, in which she tried to prove to the Israeli government, to the Israeli Executor’s Office (a government body charged with collecting debt), and to Bezeq that she could not possibly owe NIS 16,000 to Bezeq because she never had a Bezeq phone line.

She sent documents to all three institutions proving she has been living in Denmark since 1993. She obtained a record of her entries and exits from the Israeli Interior Ministry, showing that by 1999, the year of the supposed phone bill, she had been absent from the country for six years.

At one point, a staff member at the Israeli embassy in Copenhagen took her aside and advised her, in a well-meaning way, that she should just pay the bill and get it over with.

“But I didn’t want to. I don’t have the money. And paying would be like admitting to being a criminal.”

Bezeq logo

Greenberg is not alone. Getting into a financial dispute with an Israeli phone company is a common rite of passage for new immigrants and veteran Israelis alike. Type the name of any of Israel’s telecommunications companies into Facebook’s search bar and you will be confronted by a litany of complaints from users who claim they were overcharged, mischarged, lied to, and even stopped at the airport for charges they do not remember agreeing to.

Experts claim it is no accident that this is happening, but rather is part of a business culture in Israel called shitat hamatzliah, (the “give it a try” method; literally, the “success method”) in which many phone and cellular companies systematically overcharge their customers — if they succeed, great; if they get significant pushback from the customer or the customers’ lawyers, they will often back down.

Bezeq workers installing fiber optic cables (Photo credit: Courtesy)
Bezeq workers installing fiber optic cables. (Courtesy)

Adi Graff, a spokeswoman for the Israeli consumer rights organization Emun Hatzibur, told The Times of Israel that while Rika Greenberg’s Bezeq saga is unusual in that it remained unresolved for many years, it is far from an isolated case.

“The gap between promises and reality is a consistent and recurring pattern in the cellular industry,” her organization wrote in a 2015 report. “Despite regulatory steps to rein in this phenomenon, it is still the subject of many complaints, pointing to a severe problem in this industry with regard to creating clear and documented agreements between consumers and companies.”

The report goes on to describe the widespread practice of misleading the public by offering customers free phones or tablets when they sign up for a cellphone company’s service. The tablet is not actually free, but the customer generally signs a long, densely worded contract without reading it and instead relies on the salesperson’s verbal assurances.

Pelephone logo

The report said that Pelephone, as of 2015, was the worst offender when it came to misleading customers in this way. It also ranked Pelephone as the worst of the major mobile phone providers overall (with a ranking of 2 out of 5) followed by Cellcom (2.5), Golan Telecom (2.5), Hot Mobile (3) and Partner (3.5).

Tamar Nevo, head of research for Emun Hatzibur, told The Times of Israel that while there has been a slight improvement in the phenomenon since its nadir in 2014, her organization continues to receive a steady stream of complaints from customers who feel they have been defrauded by their cellular companies. The elderly and new immigrants are the populations most likely to be victims of such overcharging, she said.

Tamar Nevo, head of research at Emun Hatzibur (Courtesy)

In July 2015, the Knesset Special Committee for Public Petitions held a session entitled “Public complaints concerning the sale of devices by cellular companies while confusing customers.”

During the hearing, several customers of Israeli cellphone companies talked about how they had been given devices they thought were free and were surprised to be billed for them.

At that same hearing, Pelephone spokesman Ido Rosenberg denied any wrongdoing.

“Contrary to the claims made here, Pelephone does not instruct its representatives to cheat customers… But I do want to point out that beyond what the representative tells the customer, the customer signs a contract [and must abide by its terms].”

Cellcom logo

Liat Cohen, a spokeswoman for Cellcom, similarly stated that “like the other companies, we have no policies of telling sales representatives to cheat customers.”

A spokesman for the Communications Ministry told The Times of Israel that phone companies are forbidden by law to mislead customers by telling them one thing verbally and another in the contract. Anyone who feels they have been a victim of such misleading behavior should complain to the public complaints department of the Communications Ministry. If their complaint is found to justified, they will be reimbursed. And if the complaint fits into a pattern, the company will be fined.

Trapped by debt

But consumers complain that these consumer protection laws are rarely enforced while at the same time, any unpaid debt to phone companies is rigorously enforced by the phone company’s lawyers with the backing of the government Executor’s Office.

Ari Newman, an American film producer and novelist living in Jerusalem, was about to embark on a Passover vacation last April when he was stopped at the airport.

“There is a problem with your passport,” he was told shortly before his flight. Newman was sent to another section of the airport where the clerk told him that a lien had been placed on his passport by the Executor’s Office, due to a NIS 12,000 shekel ($3,500) outstanding debt to Pelephone (a mobile phone company owned by Bezeq) and that he could not leave the country until he paid.

Ari Newman (Courtesy)

“I canceled my Pelephone service three years ago and I never received a bill or notification indicating there was a problem. The first time I found out I owed them money was at the airport.”

Newman was forced to cancel his vacation, and in the intervening months he has tried, in vain, to receive an actual bill from Pelephone. He did manage to speak to a lawyer for the company, the one who obtained the travel ban against him.

“He still hasn’t sent me a bill. When I asked for one he simply said, ‘If you don’t pay, you can’t leave the country.’”

One in seven Israeli adults, or 709,000 people, has an open file with Israel debt collection authorities, according to the Enforcement and Debt Collection Authority’s most recent annual report.

There are a total of 2.5 million cases open with Israel’s debt enforcement authorities, of which 470,000 are debts to banks and insurance companies, while 370,000 are to phone and internet providers. Many of these debts start out small, and grow exponentially the longer they go unpaid due to collection fees, arrears interest and adjusted value. Having such a file means these individuals can at any moment experience onerous measures like having their bank account frozen, their car and property confiscated or being banned from leaving the country.

Golan telecom logo

Emun Hatzibur’s Adi Graff said the road from an unpaid telecommunications bill to the Executor’s Office is short.

“We frequently get complaints from the public where the company issued a warning letter that they did not get, and the debt gets transferred to a lawyer to collect. This is a point of no return. From that point, it’s a short path to the Executor’s Office.”

She described the case of one woman who had a case opened against her in the Executor’s Office for a debt of NIS 600 ($170) in 2004 when she was 15 years old. When the woman learned of the debt it was already NIS 50,000 ($14,300).

The departures board at Ben Gurion Airport (illustrative photo credit: Yossi Zeliger/Flash90)
Illustrative photo of the departures board at Ben Gurion Airport. (Yossi Zeliger/Flash90)

Graff describes a third case of a lone soldier who was flying back to Ukraine to visit his family. As he was about to get on the plane, he learned he had a debt of NIS 40,000 ($11,400) to Pelephone that he knew nothing about. In that instance, with the intervention of Emun Hatzibur, he was able to resolve the issue and fly to visit his family.

According to Tzvika Graiver, a co-founder and lawyer for the “Keep Olim in Israel” movement, there are three groups of people who end up losing large sums of money to Israel’s telephone companies: the elderly, the poor and marginalized, and new immigrants. Graiver is currently providing legal aid to dozens of new immigrants who have had cases opened with the Executor’s Office. Many owe money to banks, while others are indebted to phone companies.

There are two main ways that new immigrants get into trouble with telecom companies, he said. The first is that they sign without reading the contract.

“A new immigrant signs up for cellphone service. They make all kinds of promises, offering him free conversations abroad, a free tablet. He signs a contract but the contract does not say the same thing that the salesperson told him.”

Tzvika Graiver, lawyer and advocate for new immigrants from the Keep Olim in Israel movement (Photo credit: Facebook)

Despite earning billions of shekels a year, Israeli telecom companies don’t bother to translate their contracts into foreign languages, Graiver complained. This leaves the new immigrant with no choice but to sign something he can’t read.

“Suddenly he is getting all kinds of extra charges on his phone bill. If he does not pay, he gets taken to the Executor’s Office, over a few thousand shekels, Pretty soon he can’t leave country, can’t use his bank account and his life turns into a living nightmare.”

As the Association for Civil Rights in Israel explains in its report “Change Needed — How Israel Drives Debtors into Poverty”: “Enormous gulfs in power and knowledge favor creditors and disfavor debtors: 93 percent of debtors in cases at the Executor’s Office are not represented by attorneys, whereas 95 percent of creditors are represented; 91 percent of all debtors are private individuals, as compared to just 22 percent of winning parties; 78 percent of winning parties are professional creditors such as banks, authorities, etc. that are in possession of extensive knowledge about the creditor; in most cases, the creditors are repeat players in the system, whereas most debtors are encountering the system for the first time in their life; 84 percent of cases are opened directly at the Executor’s Office, without any preliminary legal proceeding and without the debt being proved before a judicial body.”

‘Only the strong survive’

According to Graiver, most debtors go before the Executor’s Office without legal representation because to hire a lawyer often costs more than they owe.

“They think this is something they can deal with on their own but they can’t. The companies are very powerful and have the best lawyers.”

Moreover, added Graiver, telecom companies hire “killer lobbyists” who spend 12 hours a day every day in the Knesset to make sure they are regulated as lightly as possible.

“If telecom companies were required to translate their contracts into English, if the Executor’s Office translated their website to English, if they sent a warning letter to the new immigrants in English, if companies were fined for lying and cheating customers, things here would change,” he said.

“The government does not want to help. Very few Knesset members actually care about the plight of ordinary people. They come and drink coffee poured for them by new immigrants from Ethiopia, who are not even Knesset employees but contract workers subsisting on starvation wages.”

“It’s called capitalism: the strong survive and the weak get weaker,” he added.

Asked why in other capitalist societies there is nevertheless a strong countercurrent on behalf of consumer rights, Graiver surmised, “I think it’s because of our security situation. We hear so much every day about Iran, the nuclear bomb, terror attacks and wars that we don’t vote for Knesset members who will take care of us economically.”

But when a consumer has a strong ally, like a lawyer, or a journalist looking into their situation, often the problem goes away, he said. That is why Keep Olim in Israel is starting a union that will pressure companies and organizations that mistreat new immigrants. “Having a large organization behind them will shift the balance of power toward consumers.”

As if to underscore his point, when The Times of Israel called Bezeq to ask about Rika Greenberg’s predicament, the issue was quickly resolved after all those months of deadlock.

“I am so happy,” she said. “Bezeq has signed an agreement” canceling all charges against her. “This issue is now over.”

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