Service page: Defense against a motion to certify a class action.
Why price transparency is a basic consumer right
When you walk into a shop and see no price, that is not carelessness, it is a tactic. Consumers who do not know the price in advance buy more, regret more, and feel taken advantage of. That is why Israel has enacted clear price transparency duties.
What does the Consumer Protection Law require?
Under the Consumer Protection Law, 5741-1981, a business must mark a price on all goods it sells. The price must include all the components, including VAT. It is prohibited to advertise “from NIS X” and then reveal at the till that there are extra charges for service, packaging or other hidden costs.
The duty to display the price on goods applies to every business that offers, displays or sells goods to a consumer (section 17B). For services, it applies in the fields the Minister has set (section 17C). And every price that a business advertises or quotes, including on a website or in an advertisement, must be the full price (section 17D). A shop that does not mark prices breaks the law, even if it did not overcharge you at all.
What is prohibited? It is prohibited to charge a higher price than the displayed price. Even if you made a mistake in the labeling, you are bound by the lower price. Keeping two prices, one on the shelf and one at the till, is a direct breach of the law.
A breach: what are the sanctions?
The Consumer Protection and Fair Trade Authority may impose a monetary sanction for not displaying the full price, for charging more than the binding price, and for advertising a price that is not the full price (section 22C(a)). Every consumer who was harmed can sue for the difference, and a business that refused the consumer’s request to charge the displayed price is exposed to exemplary damages of up to NIS 10,000 without proof of damage (section 31A(a)(5)); in a class action, exemplary damages will not be awarded (section 20(e) of the Class Actions Law, 5766-2006). And where a business did this to many people, a class action is a particularly accessible route: the damage to one person is small, but the total damage makes for a significant lawsuit. For a business that has received a certification motion: defense against a motion to certify a class action.
Price transparency online A sales website must quote the full price, including VAT and every related payment that cannot be waived (sections 17A and 17D), and in distance marketing it must disclose to the consumer the price of the item, including the delivery charges (section 14C(a)(3) and (f)). It is prohibited to reveal a mandatory shipping cost only when the consumer reaches the order summary.
Do you run a business and want to check what the law requires of it?I will get back to you within one business day.
Calls and replies in English or Hebrew
What happens after you write to me
- You write what happened and with whom. No documents.
- I get back to you within one business day for a short call of a few minutes.
- If it is a matter I handle: after the call you will receive, in writing, what will be done and what the next step is. Work starts only after you approve.
At the end of the call you will know one of three things: it is a matter I handle, and what the next step is; you can manage without a lawyer, and which guide fits; or it is outside my field, and where to turn.
What should you do if you were harmed?
Step one: demand an immediate refund at the point of sale. In Israel, if you were charged more than the displayed price, you have a right to a refund of the difference, without argument. Ask in writing, including by electronic message, to be charged the displayed price: a written request is a condition for claiming exemplary damages (section 31A(b)). Step two: if they refused, keep the invoice, photograph the price on the shelf, and contact the Consumer Protection and Fair Trade Authority through the digital complaint form on the government website. Step three: if the business does this systematically, contact a lawyer to look into a class action. Businesses that overcharge a million customers by one shekel each are sued for large amounts.
Sources
The links lead to the original legislation (in Hebrew). The binding text is the one published in Sefer HaHukim (the official gazette of statutes).
Checklist
- Practical tip: when representing businesses, check not only the price displayed in the shop but also the digital advertising: website, app, social media. The Authority also includes digital advertising in its transparency checks, and a mismatch between the advertised price and the actual charge is an independent cause of action.
- Relevant legislation: Consumer Protection Law, 5741-1981, sections 17A–17D, 22C and 31A(a)(5).
- Common mistake: businesses display a price before VAT and think it is enough to write “+VAT” in small print in the margin. The Consumer Protection Law allows only the full price to be displayed on goods (section 17B(b)(1)), and every price advertised or quoted to a consumer must be the full price only (section 17D).
- Tactical point: in a class action over a misleading price display, it is important to document the breach toward many class members; exemplary damages will not be awarded in a class action (section 20(e) of the Class Actions Law).