ECONOMY

Greek banks accused of profiteering

The banking ombudsman has accused Greek lenders of profiteering, in particularly by charging excessive interest rates on home loans, according to its latest report on the bank sector. Comments from the independant authority on practices adopted by banks highlight the implementation of abusive practices by lenders with an emphasis on the lack of information provided to customers about investment products. Problems encountered by the public in their dealings with banks are reflected in the growing number of complaints received. In the year ending May 2009, the Hellenic Ombudsman for Banking-Investment Services received 1,507 complaints relating to banks, 368 percent higher than the previous 12-month period. Complaints made against lenders accounted for 30 percent of all reports filed with the ombudsman. The report also pointed out that variable interest rates applicable on home loans subsidized by the Workers’ Housing Organization (OEK) are unfairly determined by lenders, without taking into consideration market factors. «Through this illegal behavior the banks have become unjustifiably wealthier at the cost of consumers, the Greek state and OEK,» the ombudsman said in the report. The OEK is a state body, supervised by the Employment and Social Security Ministry, which subsidizes the cost of home loans for low income earners.