Cyprus Mail
Cyprus

Complaints against banks and investment firms filed to financial ombudsman

By Angelos Anastasiou

A multitude of complaints have been filed to the Financial Ombudsman, with Cypriots submitting complaints against banks while complaints by foreigners relate mostly to investment firms, Financial Ombudsman Pavlos Ioannou said on Tuesday.

Speaking after a meeting with DISY leader Averof Neophytou, Ioannou acknowledged the need to better inform the public of the rights afforded them by the mediation procedure, as well as those emanating from the insolvency framework.

To this end, the Financial Ombudsman said, his agency is preparing an informative manual.
Neophytou said the insolvency framework enacted in Cyprus is “one of the best, compared to those of other countries, in protecting distressed borrowers”.

“We would like to thank all the parliamentary parties that helped shape this framework, all the more so DIKO and EDEK, which supported this safety net for vulnerable groups,” he said.

But he reiterated the need to inform the public of their rights, and called on Ioannou to prepare a simple and comprehensible manual that will clearly lay out citizens’ rights.

“We note that the agency has committed to having such a manual ready within one month,” DISY’s leader said, noting that insolvency frameworks in other countries only protect housing loans for primary residences, whereas Cyprus has “succeeded in covering non-housing loans if a primary residence has been mortgaged”.

He pointed out that, independent of the value of a primary residence, if the original loan taken out was for less than €350,000, the residence is in scope.

The Financial Ombudsman said Cyprus now has a truly modern insolvency framework, which “influences banks’ behaviour by its very existence, in a way that is extremely favourable in dealing with borrowers’ issues”.

Ioannou praised what he described as “banks’ consensual and constructive stance towards mediation efforts”.

He said he receives a large number of complaints from various countries on a daily basis, mostly relating to a “particular category of investment firms”, which makes his work extremely complex since such complaints tend to involve highly technical background.

Additional complexity, he said, arises from the need to communicate with people abroad, including China, Hungary, Poland, and Spain.

The Financial Ombudsman said he expects an influx of complaints from British nationals against Cypriot financial firms.

“There are many complaints,” Ioannou said, adding that over the last 45 days some 60 complaints have been filed by Cypriots, mostly relating to banks, financial firms, and securities – which the agency is legally not yet in a position to address.

He added that he estimates that approximately 750 complaints, originally filed with national oversight authorities, will be referred to his office shortly.

At the same time, he acknowledged the public’s ignorance with regard to their rights. “Indeed, we have identified ignorance and it is necessary to inform the public properly, if only to avoid creating exceedingly high expectations,” Ioannou said.

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