Cyprus Regulator Fines Bank of Cyprus and Eurobank for Unfair Mortgage Terms

The Consumer Protection Service announced on Tuesday that it has levied significant administrative fines on the Bank of Cyprus and Eurobank (Cyprus) for including unfair clauses in their mortgage loan agreements. According to the regulator, the Bank of Cyprus will pay €800,000, while Eurobank, formerly known as Hellenic Bank, is fined €600,000.

In its statement, the Consumer Protection Service explained that its review took into account the evidence gathered, the positions of the banks, and their willingness to comply with the law. The investigation concluded that multiple clauses in the Bank of Cyprus’ standard mortgage contracts, including those concerning interest rate changes, set-off rights, notices to consumers, and property revaluation, were unfair. “These terms were included in contracts from June 2021 and applied to a large number of mortgages, particularly affecting clients aged 20 to 45,” the service said.

The regulator emphasized the social and financial importance of mortgages, noting that these agreements often represent the largest financial commitment a consumer will undertake and are frequently secured against a first home. “The repeated inclusion of clauses limiting consumer rights in long-term and high-value agreements was considered an aggravating factor,” the announcement stated.

However, the Consumer Protection Service acknowledged that the Bank of Cyprus’ willingness to revise the unfair clauses and align them with legal and regulatory requirements served as a mitigating factor. In addition, the bank’s full cooperation during the investigation, including providing requested information and data, was also considered. The regulator also noted that more recent contracts from the Bank of Cyprus demonstrate improved clarity and transparency, reflecting efforts to comply with the law.

Regarding Eurobank, the regulator found that similar clauses in its standard mortgage contracts, covering repayment methods, collateral, interest, fees, charges, default events, and general set-off rights, were also unfair and non-transparent. “The review considered the bank’s submissions and commitments, and the clauses were found to violate consumer protection requirements,” the service stated.

These fines follow an ex officio investigation aimed at protecting consumers and ensuring that mortgage agreements are fair and transparent.

By fLEXI tEAM