The Consumer Protection Service on Tuesday announced that it has imposed substantial administrative fines on the Bank of Cyprus and Eurobank (Cyprus) for including unfair terms in their mortgage loan agreements.

The regulator said that the Bank of Cyprus will pay €800,000 while Eurobank, formerly known as Hellenic Bank, will pay €600,000.

In its announcement, the Consumer Protection Service explained that its review considered the evidence, the banks’ positions, and their willingness to comply with the law.

It concluded that several clauses in the Bank of Cyprus’ standard mortgage contracts, including those on 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 emphasised the social and financial significance of mortgages, saying 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 regulator explained that the Bank of Cyprus’ willingness to revise the unfair clauses and bring them in line with legal and regulatory requirements was a mitigating factor.

In addition, the bank’s full cooperation during the investigation, it continued, including providing requested information and data, was also taken into account.

What is more, the regulator observed that more recent contracts from the Bank of Cyprus show improved clarity and transparency, suggesting an effort to comply with the law.

Regarding Eurobank, the regulator said similar terms in its standard mortgage contracts, covering repayment methods, collateral, interest, fees, charges, default events, and general set-off rights, were deemed 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.

The fines follow an ex officio investigation aimed at safeguarding consumers and ensuring mortgage agreements are fair and transparent.