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Hellenic bank violated consumer rights

The Cyprus Consumer Protection Service has ruled that the Hellenic Bank violated consumer rights with abusive clauses in mortgage contracts and imposed charges for early debt repayments.

hellenic bankTHE CYPRUS Consumer Protection Service (CCPS) has ruled that Hellenic Bank, Cyprus’ third largest lender, violated consumer rights with abusive clauses included in mortgage contracts.

The bank violated consumer rights with six practices which included “vague contractual terms”. These allowed the lender to unilaterally change charges, including interest rates and use a 360-day calendar to calculate the annual interest instead of 365 days – or 366 days in leap years – the service, a division of the commerce and energy ministry, said in a statement on its website.

The probe launched by its director also found that the bank charge the consumer’s accounts, at the absolute discretion of the bank, for dues owed to it, linking their accounts to obligations they have towards the bank, and offsetting/ transferring money to any account.

In addition, Hellenic imposed charges on consumers for early debt repayments which were not included in the contracts, and had the right to demand debt repayment “at any time” imposing the payment of interest, commission and other expenses on the consumer, the consumer watchdog said. The bank also reserved additional legal and customary rights without informing customers.

Further reading

CCPS ruling against Hellenic Bank Public Company Ltd (Greek)

Readers' comments

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  • Caroline says:

    Are we able to make a claim back from Hellenic Bank charges made for early mortgage repayment?

    Ed: The decision by the CCPS was an administrative ruling not a legal ruling. But it should help if you decided to take legal action against the Hellenic Bank.

  • Janice says:

    Hellenic mal-practices sound familiar! I am with Emporiki/Alpha. Such malpractice should render the loan contracts nul and void, with compensation due. Not forgetting the CHF debacle/inflated interest rates subsequently applied, and inflated bank ‘valuations’ afforded by minimal repayments offered in 2007. These were Bank employees/directors that should have known better but instead greed got the better of them and so they got it all so badly wrong. Not the borrower’s fault at all! Banks need to be honest and accept the cost of resolving this, ideally now – rather than having to wait another 10 years.

  • Grant Bannister says:

    What about CO-OP bank. I was told that my mortgage rate would be 1% above the base rate about 5% at the time. When rates fell very low and my mortgage rate stayed the same I questioned the bank. I expected them to deny the allegation but no they admitted that was the case but they never expected rates to go so low so did not apply this agreement. UNBELIEVABLE!!! And of course they did not pay me back.

    Ed: You should take action against the bank for breaching your agreement.

  • John says:

    What will happen to Hellenic bank – I guess a wrap on the knuckles – & be told don’t do it again!

    It’s time all these banks were taken to the European court to face charges of malpractice!

    Ed: All the Hellenic Bank received was a slap on the knuckles.

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