Home Legal Matters First court ruling against bank for unfair terms

First court ruling against bank for unfair terms

Financial ombudsman Pavlos Ioannou

Lawmakers on Thursday welcomed the first court judgement against a bank for unfair terms of contract, but still harangued the banks for acting with “impunity” in terms of their service fees to clients.

Last week a court found that a bank had used certain unfair terms in a contract with a client, ordering the lender in question to cease and desist from the practice. The bank has yet to appeal the decision.

State attorney Froso Soteriou told MPs that two more similar cases have been filed in court.

Moving on to the broader issue of bank fees, legislators at the House commerce committee slammed the banks for “arbitrariness and impunity” in their dealings with customers.

Financial ombudsman Pavlos Ioannou alluded to instances where banks refuse to hand customers an account statement or other documents.

“It all stems from the immense and completely monopolistic power that banks hold against each and every consumer,” he said.

A finance ministry official said the ministry has issued a decree setting a ceiling of €36 per year for charges on basic bank accounts.

The ceiling was set after consultation with the Central Bank. The ministry has also prepared a website listing the fees charged for the main services provided by banks.

Banks have an obligation to inform clients of coming changes to fees in a timely fashion, as well as provide a report of yearly fees charged.

Regarding loan restructurings and bank fees, the Central Bank has created a complaints mechanism where borrowers can report a bank for suspected violations of the relevant legislation.

Bank of Cyprus’ Corporate Affairs Director Michalis Persianis said their pricing policy is designed to encourage clients to go digital.

He denied allegations that the bank charges elderly people or vulnerable groups at the cash counter, or that it refused to provide documents to customers.

2 COMMENTS

  1. The Bank of Cyprus unilaterally increased the margin on my housing loan from 1.75% to 3.75% a number of years ago with no warning whatsoever.

    Maybe Mr Ioannou would be interested in looking into this unfair action and all of the unnecessary interest I have had to pay for over 10 years?

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