Nicosia, Cyprus. The consumer protection service fined Alpha Bank Cyprus €160,000 over abusive terms in mortgage loan agreements and ordered the immediate withdrawal of the clauses. The decision is dated March 9 and follows a broader investigation into banks’ standard housing loan contracts.
Findings on disputed contract terms
The service said certain terms in the bank’s mortgage agreements created a significant imbalance between the rights and obligations of the bank and those of consumers, to the detriment of borrowers.
It cited clauses allowing the bank to change interest rates and the method used to calculate them without clear and objective criteria, affecting the overall cost of the loan.
Other provisions gave the bank broad powers to offset and merge customer accounts, in some cases without prior notice, and treated notices as received by the borrower even when returned undelivered.
The authority also flagged terms allowing the cost of property revaluation to be passed on to the consumer without clear limits, as well as clauses permitting the bank to debit any customer account to settle debts or terminate the agreement and demand immediate repayment for a broad range of alleged breaches without clearly defined criteria.
Mitigating factors and cooperation
The service said Alpha Bank’s proposal to amend or delete the disputed clauses was treated as a substantial mitigating factor, as it sought to align the contracts with the applicable legislative and regulatory framework.
The decision said the bank’s acknowledgement of the need to comply indicated an effort to limit the effects of the infringement and strengthen consumer protection.
It also said the bank cooperated with the authorities throughout the investigation by providing required data and information, which was taken into account when setting the penalty.
Earlier penalties in the broader investigation
The case follows earlier fines imposed as part of the same investigation. On September 23, 2025, the consumer protection service fined the Bank of Cyprus (BoC) €800,000, and on September 22, 2025, it imposed a €600,000 fine on Hellenic Bank, now Eurobank.
How could the withdrawal of these clauses affect borrowers with existing mortgage agreements?
