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Thursday 9th July 2020
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Banks using threats and blackmail

BANKS AND cooperative credit institutions do not follow the Central Bank of Cyprus’ (CBC) Code of Conduct in restructuring loans, and all borrowers are urged to take their case to court, the Borrowers’ Association head Costas Melas said on Friday.

He was speaking at a joint news conference, representing his association, the Consumers’ Association, the Bondholders’ Association, Quality of Life and Consumers’ Union, the Association for the Protection of Primary Residences, and the Coalition of Small Businesses and Self-employed.

The news conference, Melas said, was organised to help explain the Borrowers’ Association’s December 12 decision to urge borrowers to claim their rights in court.

Melas called on the CBC to take immediate measures for the code’s implementation, and announced the creation of a team of financial consultants that will “see borrowers at no charge, advising them of the type of restructuring they are truly entitled to, and inform them of banks’ obligations, as well as the actions required to safeguard their own rights.

“For those who wish to resort to the courts, documents and templates will be posted on every associations’ websites, which will help borrowers file their own court cases against banks and co-ops, or defend themselves in court,” Melas said.

He added that a Borrowers’ Code is being prepared, which will inform borrowers of their rights and obligations, and that open sessions will be organised in each district to inform borrowers of their rights.

As they are done today, the association’s head said, restructurings result in driving borrowers having to sign new agreements, through which banks and co-ops secure multiple benefits for themselves, like the borrower’s acknowledgment of the alleged amount due, which may include significant overcharges and requests for additional collateral.

“Banks and co-operatives treat borrowers unfairly, misleading them into signing whatever they suggest through unfounded lies, duress, threats and blackmail,” said Melas.

He warned that co-ops trick borrowers into arbitrations, which they misrepresent as loan restructurings, explaining that borrowers who accept arbitrations in fact acknowledge the alleged amount due, which typically includes overcharges.

“The arbitration decision then gets filed as a regular court decision, which entitles the bank to its immediate execution and the foreclosure of the collateral, thus depriving borrowers of their most important constitutional right – the right to a fair trial,” Melas explained.

He argued that it is unfair and illegal for banks to demand the repayment of loans granted with bank bonds – the value of which has been eliminated – as collateral, especially when their sale to private investors was deemed illegal by the CBC, the Cyprus Securities and Exchange Commission, and the House of Representatives.

“All the more so, since the elimination of the bonds’ value was owed to the banks themselves,” he added.


  1. Yes, we were caught up in the Swiss Franc issue.

    We tried to negotiate with the Laiki bank, for some time, but obviously when it closed we lost all contact with anyone who may have been able to assist us.

    The first we have heard from anyone since was this week when a notice of writ of summons turned up through the door from the Bank of Cyprus!

    We are now very worried about our home in the UK, its very distressing to think how much money we’ve wasted in Cyprus, and may lose out back home too.

  2. Yes I’ve heard of many Banks stalling, constantly rejecting offers, but not offering any settlement proposal. It is a common tactic in the UK but you wonder what they get from it ?

  3. We are I the same position with Alpha bank. We have re-negotiated twice now and have been told it is unlikely it will happen again. My response is you have three choices, accept what we offer, receive nothing or have the keys back. Shrugged shoulders was the reply. Do they really want empty properties that are not maintained and then become impossible to sell? Nothing is selling anyway, I know of at least three properties that have been for sale for over five years.

    Definitely need a group together to fight this it is too much for individuals.

    We have experienced the same thing in Bulgaria and finally after five years are at the point of a criminal case against the developer. Fortunately we own this one outright but many people on the development have mortgages.

    Power comes in numbers

  4. It is about time the appalling tactics being used by the banks is exposed! How can Alpha justify a ‘take it or leave it’ approach for their miserable offer in 2013, subsequently rejecting all counter offers, and then resorting to ‘bullyboy’ debt collectors just before Christmas, instructed to pile on psychological pressure and distress, and distract our lawyers. Unforgivable tactics! Then you have BoC, who refuse to offer any proposal, and reject anything suggested. Oh, and Emporiki I have heard simply stall for time, and merely request improved offers, which they always reject, but make no effort themselves. It is about time the authorities wake up to the fact that the banks are only out for themselves, and not the people. Banks forget they are a service to the people to assist with their finances, and therefore the economy of the country. But not in Cyprus – to my mind they are complete crooks, and the sooner this is recognised the sooner we can move on to a solution: We need representatives from ‘the people’ to reflect on the problems, and then come up with viable solutions, backed by ‘the people’ appointed Government representatives to enforce. Lets sort the Land registry and the banks etc for starters, and weed out all the corruption and incompetence once and for all!

  5. Peter Davis – 11 Jan 15 at 0938.

    I support your view. Those affected by the Great Title Deed Scam should form an association, raise funds by subscription, hire legal help of international standing, co-opt politicians and relevant political, business and media institutions and wage a campaign for 1) the issue of title deeds; 2) the removal of corruption and the prosecution of corrupt officials; and 3) the wholesale root and branch business process re-engineering (BPR) of the entire property system in Cyprus.

    Why BPR? – Because Cypriots with vested interests continue to amend a property system that is manifestly unfit for purpose. A perfect example of the nonsense being perpetrated is that concerning VAT at 19% being charged on a property where a change of plans is required, as reported in Antonis Loizou’s article ‘Delays in getting deeds’ in the Sunday Mail dated 11 Jan 15.

    The time has come for serious collective action rather than individual high cost efforts. How do we form such an association? Any ideas, any takers? KD.

  6. Again and again we see how the corrupt banks of Cyprus operate with their bully tactics with no address to people with mis-sold properties.

    Had a email from Alpha bank re-structure our mortgage loan starting March 2015 asking for 20543 euros upfront and repayments bases on our original CHF loan.

    My trust with Cyprus banks are at an all time low and cannot be trusted including developers, lawyers and government officials.

    Banks must be desperate?

    Make sure a good solicitor is sought.

  7. @Andrew

    I have said this many times.

    We have to accept that the legal system in Cyprus is far from proper or that it works to an acceptable standard.

    It is also accepted that one person cannot bear the costs of a challenge alone. We need an action group, something on the lines of CPAG which has served us well in the past.

    We also need to contribute financially toward this action, it is unrealistic to expect one individual to bear the financial costs alone.

    I am more that willing to contribute financially towards a war chest, notwithstanding that I am one of the lucky ones who has got my title deeds. I recall the worry though of 10 years of will I lose my home or will it (the deeds) finally come through.

    I would suggest €200-300 and see what it raises?

    Of course we then need a champion to lead us, and a high profile human rights solicitor, the Orams had Mrs Blair, but there are others on the World stage.

    Without the limelight ‘we’ will get picked off one at a time. It’s not if, but a question of when it starts happening.

  8. “For those who wish to resort to the courts, documents and templates will be posted on every associations’ websites, which will help borrowers file their own court cases against banks and co-ops, or defend themselves in court”

    Home buyers should also come together and form an organisation to offer a similar set of templates and guidance for individuals who could also be targeted by Banks .

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