Resolution No. JB-2015-3478 of the Banking Board of Ecuador

Banking Board of Ecuador

RESOLUTION No. JB-2015-3478

THE BANKING BOARD

CONSIDERING:

THAT through Resolution No. JB-2015-3344 of April 8, 2015, the Banking Board resolved: "REJECT the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A.; and, consequently CONFIRM the administrative act contained in letter No. DAyEU-V-R-2014-838 of August 1, 2014, which ratifies letter No. IRG-DAyEU-V-R-2014-668 of June 25, 2014, through which the Regional Intendancy of Guayaquil ordered Banco Pichincha C.A. to proceed with the refund of the payment of check No. 001210 belonging to Mrs. Dayse Edith Romero Pereira, for a total value of USD $600.00," fundamentally based on the following considerations:

"(...)

THAT this appeal is resolved in accordance with the First Transitional Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332 of September 12, 2014, whose text states that resolutions recorded in the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, and the norms issued by control bodies, will maintain their validity in all that does not oppose what is established in the Organic Monetary and Financial Code, until the Monetary and Financial Policy and Regulation Board resolves what corresponds, according to the case; and with the second paragraph of the Third Transitional Provision, which states that the Banking Board will continue to act until it resolves all complaints, appeals, and other administrative procedures it was handling on the date of entry into force of said Code, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board, which grants this control body competence to hear and resolve the present review appeal;

THAT through the "Free Complaint Form for Users of Entities Controlled by the Superintendence of Banks and Insurance," submitted to the Regional Intendancy of Guayaquil on April 10, 2014, Mrs. Dayse Edith Romero Pereira brought to the attention of the control body that on February 24, 2014, check No. 1210, drawn against current account No. 3119246404, which the client maintains at Banco Pichincha C.A., was paid with the forged signature of the financial user;

THAT through letter No. DAYEU-ISFP-REQ-2014-741 of April 16, 2014, the Director of User Attention and Education of the Regional Intendancy of Guayaquil, admitted the complaint mentioned in the preceding paragraph for processing, and requested from the aforementioned financial institution substantiated and documented information with the respective backing regarding the aforementioned complaint and informed the complainant about the matter;

THAT through letter No. AUD-C-R-068-2014 of May 16, 2014, submitted to the Regional Intendancy of Guayaquil on May 20, 2014, the Alternate Internal Auditor of Banco Pichincha C.A., provided attention to the request of the control body, and attached several documents related to the complaint;

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THAT through letter No. IRG-DAyEU-V-R-2014-668 of June 25, 2014, the Director of User Attention and Education of the Regional Intendancy of Guayaquil, resolved the complaint in question, in the following terms:

"(...)

From the review of the file, it is determined that the complainant was not attended to in a timely manner by the financial entity, observing the non-compliance with the aforementioned regulation.

(...)

By virtue of said operation, the client delivers money to a financial institution, with the option to withdraw it in part or totally, at the moment they require it, while the depositary entity assumes the obligation to keep or safeguard the deposited values and satisfactorily attend all those withdrawal operations required by the holder, with diligence and professional care. (...)

d) In the file, there is a photocopy of check No. 001210 dated February 20, 2014, drawn against current account No. 3119246404 of Banco Pichincha C.A., for the sum of US$ 600.00, supposedly authorized by its holder, Mrs. Dayse Edith Romero Pereira, in favor of Mrs. Jennifer Pastor Sánchez, holder of savings account No. 2200705602, it should be mentioned that it is not specified to which financial institution the latter bank account belongs.

(...)

From the foregoing, it is inferred that the check is drawn based on the available funds that the holder maintains in a current account.

(...)

g) Check No. 001210 drawn against current account No. 3119246404 that the complainant maintains at Banco Pichincha C.A. was presented for collection within the deadlines established in the articles cited in the preceding letter. (sic)

(...)

j) It is worth noting that within normal banking movement, in its speed and the financial prudence they are obliged to observe, bank employees to proceed to attend a request for fund withdrawal, must not reduce their task to a superficial review of the document that enables a user for such withdrawal.

In the present case, if we compare the signature with which check No. 001210 was issued, with that appearing in the signature register of said account, we appreciate that, at first glance, there is disagreement between them, so it is appropriate that the value collected by said check be returned to the user of the financial system.

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

1. ACCEPT the complaint presented by Mrs. DAYSE EDITH ROMERO PEREIRA, with citizenship ID No. 090389104-2, against BANCO

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PICHINCHA C.A., for the reasons explained in the sixth consideration of this resolution.

2. ORDER the controlled financial institution BANCO PICHINCHA C.A. to proceed to return to Mrs. DAYSE EDITH ROMERO PEREIRA, the sum of US$ 600.00 (SIX HUNDRED 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), to the current account No. 3119246404 of the complainant, and send to this Office, within a term of eight days, counting from the receipt of this letter, the documentation that accredits the compliance with this resolution

(...).";

THAT through communication submitted to the Regional Intendancy of Guayaquil on July 9, 2014, the lawyer María Elena Franco San Lucas, Judicial Attorney of Banco Pichincha C.A., filed an appeal for reconsideration against the administrative act contained in letter No. IRG-DAyEU-V-R-2014-668 of June 25, 2014, which was rejected through letter No. DAyEU-V-R-2014-838 of August 1, 2014, in which, at that date, the Acting Director of User Attention and Education ratified the appealed administrative act;

THAT through a document received at the Superintendence of Banks and Insurance on August 14, 2014, Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo, filed a review appeal against letter No. DAyEU-V-R-2014-838 of August 1, 2014;

THAT the arguments raised by the appellant are limited to pointing out that:

• That the bank's collaborator performs a visual confrontation of the signature recorded in the document presented for collection with the respective signature register, this constitutes a review that can never be qualified as superficial, since it involves a comparison of documents; in this way, they proceed as indicated in number 23.5 of article 23 of the Regulation to the Check Law;

• That the visual examination is sufficient to ascertain similarities or noticeable discrepancies at first glance; in this case, we can conclude that the teller who paid the check subject of the client's complaint performed this procedure; consequently, there is no basis for the control body to order the restitution of values;

• That the control body does not notice, nor even briefly, the responsibility of the client, more so it never carried out the legal nor contractual obligation that account holders have to safeguard their checkbook, so in the text of the letter being appealed, this primordial fact is not incorporated to issue a legal decision, for which reason it is not appropriate that the restitution of the claimed value has been ordered;

• That if there is a criminal act, it corresponds to the affected client to initiate the corresponding complaint, so the permanent insecurity in which we live cannot constitute an argument for the consequences of acts committed by common crime to be attributed to the bank;

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• That the financial entity has not incurred in incorrect procedures that originated the client's complaint, nor has the control body ordered the introduction of any type of corrective measure, for which reason, under no consideration, is it appropriate to order the restitution of values.

THAT through letter No. JB-2014-2209 of August 15, 2014, the Acting Secretary of the Banking Board, accepted the aforementioned review appeal for processing;

THAT number 5.12 of article 5 and number 23.5 of article 23, of chapter III "General Regulation to the Check Law", title XXIV "General Provisions", book I "General Norms for the application of the General Law of Institutions of the Financial System", of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, state the following:

"ARTICLE 5.- The current account contract must contain, at minimum, the following:

(...)

5.12 The obligation of the account holder to maintain sufficient provision of available funds for the payment of checks; and the obligation of the drawee to pay them, if they meet the legal requirements, verifying at first glance that there are no appearances of alteration;

(...)":

"ARTICLE 23.- The drawee financial institution, upon presentation of the check for payment, must examine:

(...)

23.5 That the signature of the drawer or drawers does not show notable disagreement with that registered in the financial institution, which must be similar to that recorded in the identity card or citizenship identity card or in the passport;

(...)":

THAT Mrs. Dayse Edith Romero Pereira is recorded as the holder of current account No. 3119246404 at Banco Pichincha C.A., it is evidenced that check No. 001210 was paid in favor of Mrs. Jennifer Pastor Sánchez for the value of US$ 600.00. The holder of the current account states that on February 28, 2014, she approached the financial entity to request a new checkbook, and at the same time requested a cut of her available balance, to which the financial institution informed her that the available balance in her account was USD $171.00, so she asked for a detail of her current account, realizing that a check was charged on February 24, 2014, for the amount of USD $600.00, forging the signature of the financial user;

THAT the collegiate body shares the criterion of the Regional Intendancy of Guayaquil in the sense that between the client's signature registered at the bank compared with the signature recorded in the check subject of the present case, there is a notable disagreement between them, so when the check was presented at the counter, the teller of said financial institution should have observed said notable disagreement, and consequently requested authorization from their supervision line;

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THAT to reinforce the issue, it is important to transcribe part of the technical report contained in letter No. IRG-DAYEU-2014-361 of November 20, 2014, through which the Regional Intendancy of Guayaquil stated the following:

"(...)

It is worth noting that within normal banking movement, in its speed and the financial prudence they are obliged to observe, bank employees to proceed to attend a request for check payment, must not reduce their task to a superficial review of the document enabling a user for such collection. But despite the fact that these officials by their daily and habitual activity acquire knowledge in the confrontation of their clients' signatures, they cannot be expected to have the expertise of a handwriting expert.

However, in the present case, if we compare the signature recorded in the check subject of the controversy, with that appearing in the signature register of current account No. 3119246404, there is a notable disagreement noticeable at first glance between them, so, to determine if the signature recorded in the aforementioned check is forged or not, it will not be necessary to resort to the help of an expert handwriting expert.

(...)":

THAT the obligation falls on the financial entity, depositary and custodian of its clients' money, under the protection of what is established in article 51 of the General Law of Institutions of the Financial System, in force on the date of submission of the complaint, which has the obligation to comply with the legal and regulatory norms that govern it, consequently, it is not appropriate to absolve the bank of responsibility to perform a prior examination before payment, since banks must take the necessary precautions prior to payment as indicated in article 26 of the General Regulation to the Check Law, which textually states:

"ARTICLE 26.- Financial institutions will take all necessary precautions prior to the payment of checks, according to the procedures established in the Check Law, the Law on Reordering in Economic Matters, in the Tax Financial Area, and in this chapter. These procedures must be recorded in the internal operational manuals of each institution.";

THAT the drawee bank prior to the payment of a check, has the obligation to verify, among other aspects, that the signature recorded in the check does not keep notable disagreement with the registered signature of the holder of the current account, aspect that in the present case Banco Pichincha C.A. did not comply with and therefore did not apply all the mechanisms, securities, and controls necessary to safeguard in a prudent and diligent manner the money deposited by its users;

THAT article 52 of the Constitution of the Republic; of article 1 and letters b) and o) of article 180 of the General Law of Institutions of the Financial System; it is inferred that the State guarantees to citizens the right to dispose of goods and services of optimal quality and that the Superintendence of Banks as the competent authority, has the function and attribution to watch over the stability, solidity, and correct functioning of institutions subject to its control; to supervise that they comply with the norms that govern them;

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THAT article 5 of chapter IV, title XX, book I, of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, provides that if the control body determined incorrect procedures by the financial institution, which would have caused harm to a complainant, said institutions must adopt the corresponding corrective measures when necessary, acting as ordered for those effects;

THAT although it is true that the forgery of a check must be declared by a competent judge, it is no less true that in exercise of the attributes conferred by the current regulation, the Superintendence of Banks when it determines that there was an incorrect procedure by a bank in front of a client's complaint, must order the restitution of the claimed value;

THAT Banco Pichincha C.A. incurred in an incorrect procedure by having paid check No. 001210, drawn from current account No. 3119246404, when there is an evident notable disagreement of signatures recorded in the check, with respect to the signature registered at the bank, being this a sufficient cause for the check to be returned, in compliance with the corresponding verification that should have been carried out, according to what is provided in number 5.12 of article 5 and in number 23.5 of article 23, of chapter III, book I, of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board;

THAT in the present case, it has been evidenced that Banco Pichincha C.A. is subject to article 5 of chapter IV, title XX, book I of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, since the situation that motivated the complaint was originated in incorrect procedures of the controlled institution detailed in this memorandum;"

THAT through communication received by the Superintendence of Banks on May 7, 2015, Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo and the lawyer María José Araujo Álvarez, filed an appeal for reconsideration against the administrative act contained in Resolution No. JB-2015-3344 of April 8, 2015;

THAT the Banking Board, in a session held on June 10, 2015, as established in the second paragraph of article 3, chapter II, title XVI, book I of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, heard the appeal referred to in the preceding paragraph and determined that it does not comply with what is provided in the first paragraph thereof, that is, that there are no new elements of fact or law that motivate the elaboration of corresponding reports, so it decided to deny it outright; and,

IN EXERCISE OF ITS LEGAL ATTRIBUTES,

RESOLVES:

SINGLE ARTICLE.- REJECT the appeal for reconsideration filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., against the administrative act

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contained in Resolution No. JB-2015-3344 of April 8, 2015; and, consequently, CONFIRM said resolution.

NOTIFY.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the tenth day of June of two thousand fifteen.

(Signature) Econ. Rodrigo Landeta Parra GENERAL SUPERINTENDENT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the tenth day of June of two thousand fifteen.

(Signature) Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD