When facing financial difficulties, it is important to remember that you do not have to deal with the situation on your own.
In Cyprus, a legal and regulatory framework exists to protect borrowers and consumers. There are also organisations that can provide information, guidance or assistance with complaints, depending on the circumstances.
Understanding our rights helps us make better-informed decisions and communicate with financial institutions more confidently.
As borrowers, we have the right to receive clear, understandable and timely information about the financial obligations we undertake.
Before signing a new loan agreement or accepting a restructuring proposal, it is important to fully understand the key terms of the agreement. In particular, we should know:
- the interest rate,
- the Annual Percentage Rate of Charge (APRC),
- all fees and charges,
- the loan term,
- the total amount we will repay,
- the consequences of missing or delaying loan repayments.
If anything is unclear, we should ask for clarification before making any decision.
💡 Remember:
There is no such thing as a "bad" question when it comes to our finances. If we do not understand a term, a fee or any other aspect of the agreement, we should ask for it to be explained in clear and simple language. Being well informed helps us make more confident and responsible financial decisions.
If we believe that we have not been treated fairly, or disagree with the way a financial institution has handled our case, the first step is to contact the institution directly and submit a complaint through its official complaints procedure.
In many cases, issues can be resolved through this process.
If the matter remains unresolved, it may be possible to refer the issue to an appropriate independent body, depending on the nature of the complaint.
Depending on our circumstances, support, information or guidance may be available from several organisations.
● Our Bank or Credit Acquiring Company:
This is usually the first point of contact when we are experiencing difficulties meeting our repayment obligations.
The institution may be able to explain the options available in your particular situation and provide information on possible solutions.
● Financial Ombudsman of the Republic of Cyprus (financialombudsman.org.cy):
The Financial Ombudsman is an independent institution that examines, within its remit, complaints and disputes between consumers and financial institutions.
Before approaching the Financial Ombudsman, we will generally be expected to have first submitted your complaint directly to the financial institution concerned.
● Consumer Protection Service (consumer.gov.cy):
The Consumer Protection Service provides information and guidance on consumer rights, including matters relating to financial products and services.
● European Consumer Centre Cyprus (ecccyprus.gov.cy):
If your issue concerns a cross-border transaction within the European Union, the European Consumer Centre Cyprus may be able to provide information, advice and support.
● Social Welfare Services:
If financial difficulties are affecting your ability to meet basic living needs, the Social Welfare Services can provide information about schemes, benefits or support arrangements for which you may be eligible.
● Municipalities, Communities and Voluntary Organisations
Depending on where you live, local services and support programmes may be available for individuals and families experiencing financial hardship.
These may include:
- community grocery support programmes;
- municipal and community support schemes;
- the Cyprus Red Cross;
- church-based initiatives; and
- other voluntary and charitable organisations.
While these organisations do not generally provide specialist debt advice, they may offer valuable practical assistance and support during difficult periods.
Some financial decisions can have significant long-term consequences.
For example, seeking independent professional advice may be particularly helpful:
- before signing a new agreement;
- when considering debt restructuring or debt consolidation;
- when we do not fully understand the terms and conditions of an arrangement; or
- when dealing with a particularly complex financial situation.
In such cases, obtaining independent advice before making a final decision can help ensure that we fully understand the implications of the options available to us.
✔️We have the right to receive clear and understandable information before taking on any financial commitment.
✔️ We should never sign documents that we do not fully understand.
✔️ If we disagree with a financial institution, we should first follow its formal complaints procedure.
✔️ In Cyprus, a number of organisations can provide information, guidance or assistance with complaints, depending on the circumstances.
✔️ Timely information and a clear understanding of our options can help us make better financial decisions.
👉 What's Next…
There are many misconceptions about over-indebtedness that can influence our decisions or discourage us from seeking help when we need it.
For example, some people believe that over-indebtedness only affects those on low incomes, or that it is better to ignore financial problems and hope they will disappear over time.
In the next article, we will explore some of the most common myths about over-indebtedness and examine the facts behind them.
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