Regulatory Crackdown On Unfair Mortgage Terms
Alpha Bank Cyprus has been fined €160,000 by the national consumer protection authority for including abusive clauses in mortgage loan agreements. The enforcement action forms part of a broader investigation into standard housing loan contracts used by financial institutions in Cyprus.
Unjust Contractual Provisions Under Scrutiny
The authority’s decision, which took effect on March 9, requires the withdrawal of specific contractual terms that were found to create an imbalance between consumer rights and the bank’s obligations. According to the findings, certain clauses allowed the bank to modify interest rates and the method used to calculate them without clearly defined objective criteria, which could directly affect the overall cost of mortgage loans.
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Other provisions allowed the bank to offset and consolidate customer accounts without prior notice and treated returned communications as successfully delivered. Additional clauses transferred property revaluation costs to borrowers and allowed the bank to debit any customer account to settle outstanding debts.
Efforts Towards Compliance And Mitigating Measures
During the investigation, Alpha Bank Cyprus proposed amendments to several of the disputed clauses and initiated steps to remove others. Authorities noted that the bank cooperated with the investigation and began aligning its mortgage agreements with the relevant legislative and regulatory framework.
Industry-Wide Implications And Ongoing Investigations
The decision follows similar sanctions imposed on other banks operating in Cyprus. Earlier penalties included an €800,000 fine imposed on the Bank of Cyprus on September 23, 2025, while Hellenic Bank, which now operates as Eurobank Cyprus, received a €600,000 fine on September 22, 2025.
The penalties form part of a broader review by the consumer protection authority of mortgage loan contracts offered by banks in Cyprus. Investigations into contract terms used by other financial institutions are continuing as part of the same process
