A Nicosia court ruled on Tuesday against the state-owned Housing Finance Corporation (HFC) for including unfair terms in its loan agreements with consumers, in breach of Cyprus’ consumer protection laws.

The ruling came after an application by the director of the consumer protection service, who sought a court order to stop the HFC from using these clauses in its contracts.

According to a statement from the service, the court found several terms to be abusive. These included the organisation’s right to charge banking fees and other costs at its sole discretion and at any time, without clear limits or consumer approval.

Also deemed unlawful was the HFC’s ability to cut or cancel interest rate subsidies whenever it wished, as well as its right to change loan interest rates and related charges unilaterally. The court also struck down a clause allowing the organisation to merge different accounts belonging to a customer and to use money from any of them to repay debts, at any moment and without warning the borrower.

In its statement, the consumer protection service said its top priority is to enforce the law to safeguard consumer rights. It urged all businesses to avoid abusive clauses in contracts and reminded consumers to always read the terms before signing any agreement.

The service added that it is actively monitoring the market and has already launched a new investigation into similar practices. It warned that companies failing to comply with the law will face appropriate action.