The Consumer Protection Service has imposed an administrative fine of €160,000 on Alpha Bank Cyprus for the use of abusive clauses in housing loan agreements with consumers. The decision, dated 9 March 2026, also orders the immediate cessation of the specific contractual terms identified as problematic.
The measure forms part of a broader ex officio investigation examining the standard mortgage contracts used by banks operating in the Cypriot market. The inquiry is based on the Consumer Protection Law of 2021, which empowers authorities to impose significant administrative sanctions and order the immediate termination of practices that breach consumer legislation.
Findings of the investigation
According to the findings of the Consumer Protection Service, certain contractual terms create a significant imbalance between the rights and obligations of banks and those of consumers, to the detriment of the latter. Among the clauses identified are provisions allowing the bank to alter the interest rate and the methodology used for its calculation without clear or objective criteria. Such provisions directly affect the overall cost of the loan for borrowers.
The investigation also identified clauses granting the bank broad rights to offset and consolidate a consumer’s accounts, even without prior notification. Additional terms concern the presumption that borrowers have received notifications even in cases where such notices are returned undelivered. Other provisions relate to the transfer of property revaluation costs to consumers without clearly defined limits or criteria.
Furthermore, the Service found that certain clauses allow the bank to charge any account held by the customer in order to settle outstanding debts or to terminate the agreement and demand immediate repayment for a broad range of alleged breaches, without specifying clear criteria.
Bank proposes changes to contractual terms
The decision notes that a significant mitigating factor was the bank’s initiative to propose amendments or removal of the disputed clauses in order to align its contracts with the requirements of the current legislative and regulatory framework.
Authorities also highlighted that the bank acknowledged the need to comply with the relevant legislation, indicating an intention to limit the impact of the infringement and strengthen consumer protection in the future. According to the Service, Alpha Bank Cyprus cooperated throughout the investigation with the designated authority, providing the required documentation and information. This cooperation was taken into account as a mitigating factor in determining the penalty.
Previous fines imposed on other banks
The examination of mortgage contracts has already resulted in significant administrative fines for other banking institutions. On 23 September 2025, a fine of €800,000 was imposed on Bank of Cyprus. One day earlier, on 22 September 2025, a €600,000 fine was imposed on Hellenic Bank, now operating as Eurobank Ltd. These three decisions constitute the first completed interventions by the Consumer Protection Service within the framework of the ongoing investigation.
Investigation continues
The Consumer Protection Service stated that the investigation remains ongoing and is expanding to include other banking institutions operating in Cyprus. The authority also urged consumers to carefully review the terms of loan agreements before signing them. Borrowers who believe their financial interests have been affected are encouraged to seek legal redress through the competent courts.