Banking Board of Ecuador

RESOLUTION No. JB-2015-3513

THE BANKING BOARD

CONSIDERING:

THAT according to the last paragraph of the Second Transitional Provision of the Organic Code of Monetary and Financial Law, published in the Official Register Second Supplement No. 332, of September 12, 2014, the Banking Board will continue to act until it resolves all appeals it was hearing on the date of entry into force of this Code, for a period of one hundred and eighty days;

THAT by communication received at the Regional Intendancy of Guayaquil on September 23, 2013, Dr. Olga María Monroy Gavilánez filed a complaint against Diners Club del Ecuador S.A., requesting that the regulatory body order the restitution of US$ 1,164.84, for an unauthorized consumption on her credit card, stating that on July 16, 2013, at approximately 19:50, upon returning home, she noticed that the four security locks on the entrance doors had been forced; that her belongings had been stolen, including her Diners Club International credit card; that once she reported the theft of her card, she was informed that it had already been used once; and, that the signature on the voucher of that consumption is not hers;

THAT by letter No. DAYEU-ISFP-REQ-2013-1297 of October 22, 2013, the Director of User Attention and Education of the Regional Intendancy of Guayaquil, requested the aforementioned financial institution to provide substantiated and documented information with respective physical backups regarding the aforementioned complaint and informed the complainant about the matter;

THAT through letter No. GN-GCRP-11881837-13 of November 1, 2013, received at the Regional Intendancy of Guayaquil on the 4th of the same month and year, Ms. Luz Amparo Fonnegra C., Customer Service Representative of Diners Club del Ecuador S.A., responded to the regulatory body's letter and attached several documents related to the complaint;

THAT by letter No. IRG-DAYEU-V-R-2013-631 of December 13, 2013, the Regional Intendant of Guayaquil resolved the complaint in question, in the following terms:

"(...) It should be noted that the signature on the charge note of the disputed consumption does not show obvious discrepancy with the signature registered in the cardholder's identity card. (...) In the present case, the controlled entity failed to comply with what is established in letter c) of Clause First of the Merchant Affiliation Contract, by not obliging affiliated establishments to instruct their employees to verify the identity of the cardholder, comparing the signature appearing there with the signature stamped on the charge note (voucher).

In merit of the above (...), this Office resolves:

1. ACCEPT the complaint filed by Dr. OLGA MARÍA MONROY GAVILÁNEZ (...), against Diners Club del Ecuador (...)
2. ORDER the controlled financial institution DINERS CLUB DEL ECUADOR to proceed to restore to Dr. OLGA MARÍA MONROY GAVILÁNEZ the sum of US $ 1,164.84(...), and send to this Office, within a term of eight days, counted from the receipt of this letter, the documentation that accredits compliance with this resolution.

(...)";

THAT by communication received at the Regional Intendancy of Guayaquil on December 27, 2013, Dr. César Paladines Cruz, Judicial Attorney of Diners Club del Ecuador S.A., filed an appeal for reconsideration of the administrative act contained in letter No. IRG-DAYEU-V-R-2013-631 of December 13, 2013, which appeal was rejected by letter No. IRG-DAYEU-V-R-2014-169 of March 14, 2014, with which the Regional Intendant of Guayaquil confirmed the appealed administrative act, adding that "Regarding the signature on the voucher or charge note, the only document that backed the transaction carried out at 'Cell shop', it is evident that it was not verified, as there are differences in the signature and rubric on the voucher, compared to that on the citizenship ID and that provided by Ms. Olga María Monroy Gavilánez in the 'Credit Card Issuance and Use Contract', signed between the complainant and Diners Club del Ecuador S.A.";

THAT by document received at the Superintendency on March 31, 2014, Mr. Jorge Moyano Aguilar, Special Representative of Diners Club del Ecuador S.A., with the professional sponsorship of lawyers Manuel Zurita B. and Francisco Pereira, filed a review appeal against letter No. IRG-DAYEU-V-R-2014-169 of March 14, 2014;

THAT the arguments raised by the appellant are limited to stating that there are no obvious differences between the signature on the voucher subject of the complaint and the signature on the complainant's ID; that "the employee of the commerce CELLSHOP S.A., requested the credit cardholder with which the transaction was made, the presence of the citizenship ID to verify identity and compare signatures, thereby complying with the procedure of a safe sale. The identity card was delivered by a woman to the clerk, as our client stated that her card and ID, among other documents, were stolen"; and, that "the cardholder is responsible for the use of the Card, as she is its custodian and as such must immediately report the theft or loss of the same; an obligation that in this case did not occur, as the report of the loss of the Card was given approximately 35 minutes after the consumption made, so according to the contract signed with the Cardholder, and the applicable current provisions, the Cardholder is responsible for the consumption";

THAT by letter No. JB-2014-747, of April 4, 2014, the Secretary of the Banking Board accepted the aforementioned review appeal for processing;

THAT Article 1 of Chapter V.- Constitution, functioning and operations of issuing or administering companies of credit cards and credit card departments of Financial Institutions, Title I.- Of the constitution, Book I.- General norms for the application of the General Law of Institutions of the Financial System, of the Codification of Resolutions of the Superintendency of Banks and Insurance states that: "A 'credit card' shall be understood as the document issued by a financial institution or financial services institution authorized by the Superintendency of Banks and Insurance, which allows its holder or user, disposing of a credit line granted by the issuer, to acquire goods or services ..."; that is, the credit card is a payment method with credit money, coming from an issuer instrumented in a contract containing rights and obligations, among which is the cardholder's commitment to pay for consumptions in the manner agreed in the same, as well as the care and use of the credit card delivered by the issuer, which becomes plastic money and susceptible to use with the mere presentation of the same;

THAT Articles 13, numeral 13.9, 15, numeral 15.2 of the aforementioned Chapter V, Title I, Book I, of the Codification of Resolutions of the Superintendency of Banks and Insurance and of the Banking Board, provide:

"ARTICLE 13.- The contract to be entered into between institutions authorized to issue or administer credit, payment, or affinity cards and cardholders,... shall contain as a minimum the following: (...) 13.9.- Conditions related to the loss, theft, or deterioration of the card. If any of these cases occur, the cardholder, duly identified by full name, identity or citizenship ID number, and card number, must notify the issuer thereof, the first not being responsible, from that moment on, for consumptions made on the card reported as lost or stolen. The notification may be made in writing or by telephone, in which case the magnetic message shall constitute means of proof, according to what is provided in Article 125 of the Civil Procedure Code. The notification made by telephone must be ratified in writing within a term of 48 hours; (...)".

"ARTICLE 15.- Institutions authorized to issue or administer credit, payment, or affinity cards, must enter into written contracts with affiliated establishments, in which at least the following clauses shall be stipulated: 15.2 Obligation of the establishment to issue the charge note and to verify that the signature and rubric provided by the cardholder is the same as that on the back of the card. In case of doubt, the establishment will require the identification document and will note the identity card or passport number on the receipt;";

THAT in Clause Sixth of the credit card issuance and use contract signed between Diners Club del Ecuador S.A. and Dr. Olga María Monroy Gavilánez, the obligations assumed by the cardholder are stipulated, one of which is to notify the financial institution of the loss, theft, or robbery of the credit card, thereby assuming the obligation to recognize consumptions that had been made prior to having reported the credit card as stolen or lost;

THAT from the aforementioned regulations, it is observed that upon the occurrence of the circumstance of theft, robbery, etc., the cardholder is obligated to communicate to the issuer, in this case, Diners Club del Ecuador S.A., immediately the event produced, so that said card becomes disabled; and, as the credit card holder bears the obligation to communicate its loss and to take charge of expenses made with it until the moment of formulating their notice, the issuer corresponds to communicate such circumstance by the agreed means to affiliated establishments so that they abstain from accepting consumptions on said cards;

THAT in the present case, the consumption was made in the CELLSHOP store on July 16, 2013 at 20:45, while the card was blocked at the request of the cardholder on July 16, 2013 at 21:27, so it can be inferred that, indeed, as the appellant argues, the report was subsequent to the execution of the transactions;

THAT regarding this topic, the jurist Andrés Mariño López, in his work "Liability for Improper Use of Credit Cards", (page 292), says: "It is necessary to take into account, in addition, the interconnection that exists between the obligation to notify in an immediate manner and by adequate means the knowledge of the situation of risk of improper use and the obligation to conserve the credit card. (...) On these bases, the user, once the effective production of a theft, loss, or other risk situation for the card is confirmed, must communicate this fact to the issuing entity with the greatest possible speed by a reasonably adequate means for it. When the cardholder has made the communication of the situation of risk of improper use to the issuing entity with the due diligence determined according to the indicated bases, then, the credit card holder does not breach their notification obligation and does not incur liability.";

THAT regarding this same issue, the Argentine treatise writer Roberto A. Muguillo, in his book "Credit Card" (page 143), establishes that: "The credit card system imposes on the user the duty of custody of their own card, as it constitutes the enabling means of the transactions they can carry out within the limit of their credit. Such responsibility will only yield to the report of loss, theft, or robbery that must be notified to the issuing entity.";

THAT the current regulation is in harmony with the doctrine previously transcribed, so the appellant's argument is pertinent;

THAT within the file formed around the present case, the security camera videos of the CELLSHOP establishment at the time the disputed transaction was carried out are contained, from which it can be appreciated that the employee of said commercial establishment requires the person making the purchase, the physical presence of the cardholder's citizenship ID, and even the invoice was issued in the name of Ms. Olga María Monroy Gavilánez. Therefore, there was no breach by the commercial establishment of what is established in numeral 15.2 of Article 15 of Section III, Chapter V, Title I, Book I of the Codification of Resolutions of the Superintendency of Banks and Insurance and of the Banking Board, which establishes the establishment's obligation to verify the identity of the cardholder, confronting the signature appearing there with the signature on the voucher at the time of the transaction; and, that the signature and rubric provided by the cardholder is the same as that on the back of the card;

THAT regarding the signature on the voucher, which has not been assumed by the cardholder as their own, the aforementioned numeral 15.2 of Article 15 of Chapter V, Title I, Book I of the Codification of Resolutions of the Superintendency of Banks and Insurance and of the Banking Board, previously transcribed, states that establishments shall adhere, only in case of doubt, to the presentation of the cardholder's citizenship ID or passport to confront the consumer's identity, not corresponding to them to verify the authenticity of the signature of the owner or holder of the credit card;

THAT there are contradictions in the administrative acts issued by the Regional Intendancy of Guayaquil, since in the administrative act issued in first instance in the complaint filed by Ms. Olga María Monroy Gavilánez, contained in letter No. IRG-DAYEU-V-R-2013-631, of December 13, 2013, it was stated that "the signature on the charge note of the disputed consumption does not show obvious discrepancy with the signature registered in the cardholder's identity card"; while in the administrative act by which the appeal for reconsideration filed by Diners Club del Ecuador S.A. was resolved, contained in letter No. IRG-DAYEU-V-R-2014-169, of March 14, 2014, said Regional Intendancy stated that "Regarding the signature on the voucher or charge note, the only document that backed the transaction carried out at 'Cell shop', it is evident that it was not verified, as there are differences in the signature and rubric on the voucher, compared to that on the citizenship ID...";

THAT it has not been evidenced in the present case that Diners Club del Ecuador S.A. is subject to Article 5 of Chapter IV.- Procedure for the attention of complaints against institutions of the financial system, Title XX.- Of the Superintendency of Banks and Insurance, Book I.- General norms for the application of the General Law of Institutions of the Financial System", of the Codification of Resolutions of the Superintendency of Banks and Insurance and of the Banking Board, since it has not been proven that the situation that motivated the complaint originated in an incorrect procedure of the controlled institution;

THAT the Banking Board in similar cases has resolved review appeals accepting the analysis contained in the preceding numerals. I cite as an example Resolution No. JB-2012-2268, of August 17, 2012, which was based on Memorandum No. INJ-DNJ-SAL-2012-0926, of July 25 of that same year;

THAT the National Legal Intendancy, through memoranda INJ-DNJ-SAL-2014-0864 and INJ-DNJ-SAL-2014-0490 of November 6, 2014 and July 3, 2015 (sic), respectively, recommended the Banking Board to accept the claim contained in the review appeal filed;

AND, in exercise of its legal attributes,

RESOLVES:

SINGLE ARTICLE.- ACCEPT the claim contained in the review appeal filed by Mr. Jorge Moyano Aguilar, Special Representative of Diners Club del Ecuador S.A.; and, consequently LEAVE WITHOUT EFFECT the administrative act contained in letter No. IRG-DAYEU-V-R-2014-169, of March 14, 2014, with which the Regional Intendancy of Guayaquil ratified letter No. IRG-DAYEU-V-R-2013-631, of December 13, 2013.

NOTIFY.- Given at the Superintendency of Banks, in Quito, Metropolitan District, on July 9, two thousand fifteen.

Econ. Rodrigo Landeta Parra GENERAL INTENDANT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on July 9, two thousand fifteen.

Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD