Sharp criticism has been directed at Cyprus’ Legal Service over what consumer advocates describe as unjustified delays in pursuing court cases against banks over unfair mortgage clauses.
According to an article published by the Cyprus Consumers’ Association’s legal officer Virginia Christou, several cases dating back as far as 2015 remain unresolved despite findings by the Consumer Protection Service that potentially abusive terms were used in mortgage contracts.
The Cyprus Consumer Protection Service had already completed applications for injunctions against banking institutions in 2015. However, many of these cases have yet to be heard in court, raising concerns about enforcement of legislation designed to protect borrowers.
Christou questioned how newer cases progressed through the courts more quickly while older ones, involving confirmed violations affecting thousands of consumers and mortgage borrowers, remain stalled for years.
Long list of pending consumer cases
Among the unresolved cases are those involving Alpha Bank Cyprus, Bank of Cyprus, Hellenic Bank, the former Cooperative Cyprus Bank, and National Bank of Greece (Cyprus).
Several of the decisions identifying problematic clauses were issued between 2015 and 2018, before being forwarded to the Legal Service for further action. Yet despite the time elapsed, many remain pending without judicial review.
By contrast, two more recent cases moved through the courts at a far faster pace.
One involved Societe Generale Bank – Cyprus Ltd, where the Consumer Protection Service issued a decision in 2017. In February 2021, a court ordered the immediate cessation of 13 clauses in mortgage loan agreements deemed abusive.
Another ruling came in May 2025 against the Housing Finance Corporation, with the Nicosia District Court issuing injunctions preventing the continued use of unfair clauses in loan contracts. The decision was widely described by stakeholders as a landmark judgment for consumer protection.
Banks face significant fines
Meanwhile, regulators have recently stepped up enforcement action.
Last week, the Consumer Protection Service imposed a €160,000 administrative fine on Alpha Bank Cyprus for the use of unfair terms in mortgage agreements signed between 2017 and 2025. The clauses affected nearly 5,000 contracts, many involving borrowers aged between 20 and 45.
The bank indicated it would amend the clauses in future contracts and notify existing borrowers while waiving rights linked to the disputed provisions.
The penalty follows two major fines issued in September 2025: €800,000 against Bank of Cyprus and €600,000 against Hellenic Bank (now part of Eurobank). Together, the rulings concerned more than 22,000 mortgage agreements.
Further investigations on behalf of consumers
Cyprus’ Consumer Protection Service has confirmed that investigations into mortgage contract terms across other banks are ongoing. Officials say a new wave of inspections will begin in 2026 as part of broader efforts to strengthen oversight of lending practices.
At the same time, proposed legislative amendments aimed at reinforcing consumer protection against unfair contractual clauses are expected to be debated in parliament before its dissolution in April.
