The commerce ministry’s Consumer Protection Service has slapped Alpha Bank Cyprus Ltd with a €250,000 administrative fine, having found that the bank engaged in unfair commercial practices at the expense of its customers.
According to a statement, having carried out an ex-officio investigation, the Consumer Protection Service discovered that Alpha Bank included a number of unfair terms in housing loan agreements.
Specifically, Alpha Bank omitted to notify, or inadequately notified, customers of the attendant risks in being granted loans in a foreign currency.
In addition, loan agreements included a number of vaguely worded terms, relating to the disbursement of the loan, the charges to the borrower and changes to these charges, and to terms relating to early repayment.
The bank meanwhile charged customers who took out these loans €5 per email notification, and €50 per notification by post.
In addition, bank statements sent to customers included a reference that the charges levied were assumed to be correct if the customer failed to challenge the charges within 14 days of receipt of the statement.
Alpha Bank also included a term whereby customers were said to affirm that the loan agreement was perfectly lawful.
The lender also incorporated a term designating Cypriot courts as the competent courts for the adjudication of disputes in cases where the loan agreement had been concluded with residents of EU countries, except Denmark.
The bank was ordered to terminate these practices and advised not to repeat them in the future.
The Consumer Protection Service additionally issued a decision against Bank of Cyprus, finding that the lender likewise included unfair terms in housing loan agreements. It made no mention of a fine at this point.
The service also imposed a €60,000 fine on Aelius Developers Ltd, following a complaint lodged by a customer of the company.
According to the complaint, the company did not inform the property buyers of a pre-existing mortgage on the property, nor that this could cause problems in securing a title deed.
The buyers further claimed that on the date they signed the purchase contract, the seller – Aelius Developers – did not possess the required town-planning and building permits.