The Cyprus Consumers’ Association notes that the unfavorable treatment of consumers towards banks continues.
The Cyprus Consumers’ Association states in a statement that it regrets that the unfavorable treatment of consumers towards banks continues.
As mentioned, on April 5, 2020, the Association, on the occasion of the enactment of law 33 (I) / 2020 and the issuance of Decree KDP 134/2020, in a public announcement, argued that the nine-month suspension of installments creates serious additional financial obligations to consumers and called on consumers to be informed of the additional costs they will incur before requesting a suspension of their doses. At the same time, he called on banks to inform consumers about the real additional costs that will be borne.
Unfortunately, he notes, banks to date refuse to provide this information to consumers, despite the relevant urgings of the Central Bank.
According to the association, by mid-June 2020, a total of 50,586 applications for suspension of installments were submitted (for households and businesses), which correspond to the total amount of installment suspension of 1.37 billion euros.
It is noted that the average interest rate of 1.37 billion imposed on consumers is estimated at 3.5%, while the current borrowing rate in the market is below 2%. This means that those requesting a installment suspension will pay, for the nine-month period alone, the additional total amount of 15 million, compared to the current market rate. In addition, it is pointed out that these 15 million will increase significantly, if their interest rates are taken into account until the full repayment of the loans.
The Cyprus Consumers’ Association understands the insurmountable need of consumers to alleviate their financial obligations. But what he notes, which he does not understand and criticizes, is the unfavorable treatment of consumers towards banks.
“If there was a real will to help consumers, the rate of installment suspension should be at the current market rate which is below 2% and not at 3.5% on average. “The Association wonders if it was a condition for the banks to have additional benefits to accept the nine-month installment suspension?”