BANKS went ahead and increased their charges, despite being aware of an EU Directive banning them from doing so without consulting with their customers first, the House heard yesterday.
MPs were incensed to hear a circular letter had been sent by banks to their customers informing them on changes in their personal loan and mortgage charges – despite being fully aware of the fact that the directive was being discussed at parliament and that its regulations would be passed into law in a matter of weeks.
Legal Affairs Committee Chairman, DISY’s Ionas Nicolaou, said the bill and directive aimed at protecting consumers from charges and conditions imposed by banks on personal loans and mortgages.
“While this discussion is underway at the Legal Affairs and Commerce Committees – in the presence, in fact, of the Banks’ Association and Co-op banks – a list of commissions and charges has been sent to bank customers – a revised list – which seems to indicate that charges have increased compared to before, or that added charges have been imposed without the consent and agreement of their customers,” said Nicolaou.
He added that this contradicted the relevant European directive, as well as the bill being discussed currently, which MPs hope to pass into law by the end of this month.
“I wonder if the circulation of this revised list is related to the fact that this law has not yet been approved?” said Nicolaou.
But he added that banks seemed to overlook the fact that there is an EU directive, which is binding and prevents banks from imposing or increasing charges without first consulting with their customers.
The Banks Association has now been asked to inform parliament on these charges.
“It seems that because the necessary checks hadn’t been carried out until today, some think they can do what they like,” said Nicolaou.
He blasted the Commerce Ministry for sidestepping its duty to protect consumers.
“Absolutely no reaction was made on part of this service over these charges, despite the fact they had received complaints by consumers,” said Nicolaou. “I wonder how we are protecting our consumers when the relevant government services show such indifference.”
