The Cyprus Consumers Association on Monday questioned the sincerity of the Consumer Protection Service in genuinely safeguarding consumers against unfair clauses in bank contracts.

The association welcomed the recent imposition of fines on the Bank of Cyprus and Eurobank (formerly Hellenic Bank) for including unfair terms in their mortgage loan agreements, but highlighted long-standing concerns.

“These decisions were issued four years after the new Consumer Rights Law, N.112(I)/2021, came into effect, leaving consumers unprotected for a significant period,” the association said.

Specifically, the Consumer Protection Service announced on September 23 that the Bank of Cyprus will pay €800,000 while Eurobank will pay €600,000 following its review of mortgage contracts.

“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 regulator said at the time.

The review 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.

The regulator said that Eurobank’s contracts also included unfair and non-transparent clauses relating to repayment methods, collateral, interest, fees, charges, default events, and general set-off rights.

“The repeated inclusion of clauses limiting consumer rights in long-term and high-value agreements was considered an aggravating factor,” the service added, noting that the banks’ willingness to revise the clauses and their cooperation during the investigation were mitigating factors.

Meanwhile, the Cyprus Borrowers Association (Syprodat) described the fines as a “significant turning point” in the country’s banking and consumer policy.

“This decision strengthens citizens’ right to fair, balanced and transparent contracts,” the association said, noting that 22,132 contracts were identified with unfair and disproportionate clauses.

Despite the fines, the Cyprus Consumers Association raised questions about the Consumer Protection Service’s broader approach.

“The service has publicly stated that it cannot do more to assist consumers and has urged them to pursue individual legal action,” the association said, adding that it believes the regulator could take stronger measures.

It further questioned why, since 2007, the Service has ignored provisions under Laws 101(I)/2007 and 91(I)/2023 aimed at protecting collective consumer interests and has not initiated legal proceedings against the banks.

“The actions to date cast doubt on the regulator’s genuine intent to protect consumers from abusive clauses in banking contracts,” the association said.

Finally, the association said that its concerns are compounded by the delay in enforcement and the fact that consumers have been left unprotected for years, potentially affecting tens of thousands of mortgage agreements.