Consumer watchdog hits Alpha Bank with €160,000 penalty

Alpha Bank Cyprus was fined €160,000 by the consumer protection service over abusive terms in mortgage loan agreements, in the latest enforcement action arising from a broader investigation into banks’ standard housing loan contracts.

The decision, dated March 9, also ordered the immediate withdrawal of the specific clauses.

According to the service, 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.

These included clauses allowing the bank to change interest rates and the method used to calculate them without clear and objective criteria, directly affecting the overall cost of the loan.

Other problematic provisions gave the bank broad powers to offset and merge customer accounts, in some cases without prior notice, while also treating notices as received by the borrower even when they had been 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.

The service said Alpha Bank’s move to propose amendments or the deletion of 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 also said the bank’s acknowledgement of the need to comply pointed to an effort to limit the effects of the infringement and strengthen consumer protection going forward.

In addition, the bank was found to have cooperated with the authorities throughout the investigation by providing the required data and information, which was also taken into account when the penalty was set.

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, while on September 22, 2025, it imposed a €600,000 fine on Hellenic Bank, now Eurobank.

The three decisions mark the first broad interventions by the service under its ongoing review of mortgage loan contracts in Cyprus.

The investigation is continuing and has been extended to other banks operating in the country, as the authorities seek a fuller assessment of the terms used in mortgage lending.

The service also urged consumers to examine loan terms carefully and, where they believe their financial interests have been harmed, to pursue their rights through the courts.