These are the areas where we have lost the most money

How much money did consumers lose in the first wave of the Corona crisis? This is what the Consumer Protection and Fair Trade Authority sought to estimate, through a survey conducted among 5,515 participants, selected as a representative section of the adult population in Israel. The survey was conducted during June, when since then, further financial damage has accumulated. On the other hand, it can be assumed that some of the amounts lost were reimbursed, but consumers were often forced to fight for this reimbursement.

When distributing the survey participants were asked the question “Have you incurred any financial losses as a result of consumer transactions you conducted due to the corona crisis?” – Refers to a financial loss resulting from a transaction made as a consumer with a particular business. Only those who answered yes continued to answer the questions detailing the consumer harm. Out of 5,515 participants, 2,411 responded that they were harmed and detailed about 28 areas of consumption and about 3,627 transactions made.

According to consumer responses to the survey, the average average damage to a single consumer was in the field of event halls and gardens – about NIS 16,582 per consumer. This is followed by the financial services sector, in which the consumer suffered damage of approximately NIS 11,767, followed by the tourism sector – with damage of NIS 5,512 per consumer.

According to the answers, the Authority’s economists made estimates based on the CBS data of the size of the population aged 18-70: about 5.24 million. The total damage, estimated according to the results of the survey, stands at about NIS 5.33 billion. The first, and therefore likely, is that for some of the reported damages a solution has been found, even a partial one, which may reduce the entire damage.Either way, even a late refund given to a consumer is damage.

The largest number of consumers affected is in the tourism industry and stands at about 323,000 followed by in the gym / gymnastics industry and stands at about 277,000 consumers and in the field of education, culture and entertainment, this number stands at about 255,000 consumers.

The largest damage caused to consumers, according to estimates, in total, was in the tourism industry and stands at about NIS 1.366 billion. The credit companies estimate that the Authority’s estimate is too small and that the damage is much greater. An analyst at one of the companies told Yedioth Ahronoth: “The PA’s numbers seem a bit low. From our past analyzes, about 50% of adult Israelis fly abroad, about 3 million Israelis, including children. Flight volumes have dropped by up to 80%. From this it can be assumed that most of the people who were used to flying did not fly, about 2 million people. They claim that only 300,000 people were injured. We believe 2-1.5 million people were injured. “Some bought a ticket and some intended to buy a ticket and did not fly.”

In the area of ​​events, the damage to consumers is estimated at NIS 599 million. The credit companies emphasize that: “Regarding events, the credit companies have no information, because people pay in unsecured checks. There are about 200,000 events a year, it can be estimated that 70% are canceled. Most cancellations are made over the companies’ heads, between the consumer and the company And not everything comes to us. “

Another credit company told us: “This year there was an increase in transaction denials, some of the businesses were not transparent and clean in front of customers.”

According to a survey conducted by the Histadrut Consumer Authority, 25% of the 500 participants in the survey said that they reduced shopping in the field of tourism this year. 22% responded that they bought fewer tickets to cultural shows, another area where consumers were harmed and their money was not returned to them to this day. The Consumer Protection Authority estimates the damage in the field of education, culture and entertainment at NIS 557 million.

Additional damages were caused to consumers in the areas of transportation, kindergartens, financial services, apartment maintenance and apartment equipment. Consumers also suffered financial damage due to delays in deliveries, and an increase in purchases of pharma products and nutritional supplements.

Despite the data, most consumers understood the situation already in March and stopped making deals in areas that had come to life or were dying. For example, according to data from the Ern company, for clearing payments, there was a 84% decrease in transactions made in checks in the field of tourism, while there was also a 12% decrease in the average transaction in the field.

It should be borne in mind that surveys, even if large-scale, do not always faithfully reflect reality. First, not all consumers are willing to participate in surveys and in addition, those who do participate, often exaggerate or underestimate the answers, because they do not remember the exact amount or to leave a certain impression. This is why the survey gives a clue, an indication of what is happening in the market and these are not necessarily true data.

The authority’s chief economist, Dr. Dalia Shillian, explains that some of the estimates were based “not only on the survey responses, but also on truth data. Regarding event gardens, we had data from other surveys by the Ministry of Justice. A private member’s bill has also been submitted that event gardens must return money to consumers or allow them to exit the contract at a low cost.

“Regarding the loss of money to parents who paid for private kindergartens, we could know how many children attend kindergartens from 0-3 years of age according to the committee. At weddings and kindergartens we were involved in compromise agreements between the bodies and consumers. No longer a contract breach, not an unknown factor but a known and predictable factor.The arrangement regarding the gardens is on the website of the Ministry of Justice and I know many gardens adopt it.About events we even went on to legislate in the Kaminitz Committee, where estimates were important Market regulation. ”

“Another loss of customers’ money occurred in the field of tickets and cultural performances, which we also dealt with as part of our activities in the Kaminitz committee. The arrangement decided upon was to give a voucher for a canceled show, valid for one year and if you do not use it. “Airlines are forming an arrangement, it is no longer in our domain, according to which they must offer a refund or an alternative date, according to the consumer’s choice, if 90 days have passed from the date of the flight,” explains Shillian.

“Another area where consumers have lost their money in Corona is loan sting. The loan market is growing due to the financial distress of the public. As a result, many have fallen victim to financial sting,” adds Shillian.

“The survey allowed the Authority, among other things, to determine which issues it should intervene in, determine policy and provide protection to the consumer public. The survey found that there is harm to consumers in a variety of areas in the economy.” To intervene in relevant markets by a variety of means, due to its role as a regulator in the field of consumerism. “