The Consumer Protection Service has recently issued a statement addressing complaints regarding abusive clauses in financial contracts, which follows the initiation of an infringement procedure (INFR(2024)0018) against Cyprus by the European Commission. The key points from the announcement are as follows:
Context and Legislative Background
The infringement procedure relates to the implementation of Directive (EU) 2021/2167, which regulates credit servicers and credit purchasers. This directive, comprising seven legislative acts, is essential for the management of non-performing loans across the EU, setting common standards and requirements for handling credit portfolios.
Implementation and Legal Actions
Responsibility for transposing this directive lies with the Ministry of Finance. Discussions on drafting the necessary legislative text are ongoing in the House of Representatives. The European Commission’s infringement procedure aims to ensure that Cyprus aligns its national legislation with EU standards. According to Law 93(I) of 2021, the decisions made by the Consumer Protection Service regarding abusive clauses are considered binding administrative acts. This means that these decisions are enforceable and supported by the existing legal framework.
Consumer Protection Efforts
The Consumer Protection Service has taken significant steps to protect consumers from abusive clauses. Under Article 9 of the relevant law, the Service has filed lawsuits against various financial institutions based on specific administrative decisions. These lawsuits seek prohibitive orders to stop the use and recurrence of abusive clauses. The issuance of these lawsuits is currently pending in the relevant courts. Moreover, the Consumer Protection Service is empowered to make legal and administrative proposals concerning abusive clauses. This authority is crucial, especially in light of the significant year of 2021, which marks a critical period for reviewing and addressing terms related to abusive clauses and contract expirations.
Commitment to Consumer Rights
The Consumer Protection Service emphasizes its ongoing commitment to enhancing and safeguarding consumer rights. It ensures the full and accurate implementation of legislation, countering any misleading information that could potentially confuse consumers. The Service continues to work diligently, maintaining transparency and accuracy in its communications and actions. This proactive approach by the Consumer Protection Service highlights its role in fostering a fair and transparent financial environment, protecting consumers from exploitative practices, and ensuring compliance with European standards.
The efforts by the Consumer Protection Service to address abusive clauses in financial contracts underscore its commitment to protecting customer rights and ensuring compliance with EU regulations. The ongoing legal actions and the proactive stance taken against financial institutions demonstrate a robust approach to enforcing customer protection laws. As Cyprus aligns its national legislation with Directive (EU) 2021/2167, the transparency and diligence exhibited by the Consumer Protection Service are pivotal in fostering a fair financial environment. The initiative not only safeguards consumers but also reinforces the integrity of the financial system in adherence to European standards. The continued vigilance and legal measures are essential in mitigating any potential misuse and ensuring that consumer interests remain at the forefront of regulatory practices.
For any further guidance regarding this procedure or if you require an initial consultation, please do not hesitate to contact our Law Firm at [email protected], +357 22 251 777 or +357 25 261 777 or please visit our office in Nicosia or Limassol.