The Consumer Protection Service (CPS) said it has fined Alpha Bank 250,000 Euros for unfair consumer practices, and ruled against Bank of Cyprus on unfair mortgage clauses.
In the case of Alpha Bank, the CPS found that their customers weren’t informed about the risks of taking out foreign-currency loans, and that their contracts were unclear about the burden of charges, interest and other expenses. In addition, the fees for informing clients were 50 Euros per letter and five Euros per email, said the CPS.
Alpha Bank abused consumer rights with contract clauses stating that the client agrees that the loan is legally valid and setting the courts in Cyprus as the means of settling disputes, even if the loan was taken out in another EU state.
The bank was ordered to cease and desist all similar practices in the future.
Finally, the CPS found that Bank of Cyprus’ mortgage contracts contain unfair clauses, paving the way for challenges in foreclosures or other disputes.
Consumer after consumer in Cyprus has found unexpectedly high charges on their accounts, either from interest or charges and it’s often unclear how the customer’s deposit is distributed between interest and capital in their loan account. These unexpected costs can often push the average consumer into greater debt and in today’s tentative economy, into losing their homes or other assets.
Under EU and Cyprus laws, consumers have rights to fair treatment and transparent business practices. This includes clear contracts with simple terms and conditions. The main point is that contracts have to be fair and in good faith.
“Standard contract terms may not create an imbalance in the rights and obligations of consumers on the one hand and sellers and suppliers on the other. If specific terms in a contract are unfair, they are not binding on consumers and the trader may not rely on them,” according to Europa.eu.
Be connected with Cyprus! Join CNR News Club for updates on articles and blogs!
[inbound_forms id=”47190″ name=”Create your free membership account:”]