Banking Board of Ecuador

RESOLUTION No. JB-2015-3372

THE BANKING BOARD

CONSIDERING:

THAT this appeal is resolved in accordance with the First Transitional Provision of the Organic Code of Monetary and Financial Affairs, published in the Official Register Second Supplement No. 332 of September 12, 2014, whose text states that resolutions contained in the Compilation of Resolutions of the Superintendence of Banks and Insurance and of the Banking Board, and the norms issued by the control bodies, will remain in effect in all that does not oppose what is established in the Organic Code of Monetary and Financial Affairs, 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 that it was hearing as of the date of entry into force of the same, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT through the "Free Complaint Form for Users of Entities Controlled by the Superintendence of Banks and Insurance" dated October 22, 2013, Ms. Mónica Evelyn Sánchez Zalamea, brought to the attention of this control body that a value of USD $80.50 was stolen from her savings account No. 6358200500, which she maintains at Banco Pichincha C.A., via withdrawals at automated teller machines (ATMs);

THAT through Official Letter No. DAYEU-ISFP-REQ-2013-1456 of November 14, 2013, the Director of User Attention and Education of the Regional Intendancy of Guayaquil, admitted the aforementioned complaint to proceedings, requested the referred 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 Official Letter No. BP-ACEC-2013-0974 of December 3, 2013, entered into the Regional Intendancy of Guayaquil on the same day, month, and year, Ms. Glenda Icaza Aguirre, authorized signatory of Banco Pichincha C.A., responded to the official letter of the control body, and attached several documents related to the complaint;

THAT through Official Letter No. IRG-DAYEU-V-R-2014-393 of May 9, 2014, the Regional Intendant of Guayaquil, resolved the complaint in question, in the following terms:

"(...)

By virtue of said operation, the client delivers money to a financial institution, with the option to withdraw it, in part or in total, at the moment he requires 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.

c) The withdrawal challenged by the complainant, carried out through an automated teller machine, charged to savings account No. 12180058180, is within the limits authorized by the financial entity, that is, US$ 500.00.

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d) As observed from the movements of savings account No. 6358200500 sent by the entity, the balance existing before carrying out the transaction was US$ 82.93 and after them, a available amount of US$ 2.43 is reflected, which, after five inquiries made, was reduced to US$ 0.08.

e) It is impossible to establish if indeed the withdrawal for the amount of US$ 80.50 was dispensed to the user, since the security camera video of the ATM in which the transaction was made was not sent. Although Banco Pichincha C.A. alleges having requested it from the institution owning the ATM where the withdrawal was made, it did not attach proof of them, which demonstrates the management it claims to have carried out.

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

1. ACCEPT the complaint presented by Ms. Mónica Evelyn Sánchez Zalamea, with citizenship card No. 0925963860, against the controlled financial institution BANCO PICHINCHA C.A. for the reasons indicated in the sixth consideration of the present official letter.

2. ORDER the controlled financial institution BANCO PICHINCHA C.A. to proceed to restore to Ms. Mónica Evelyn Sánchez Zalamea the sum of US$ 80.50 (EIGHTY 50/100 DOLLARS OF THE UNITED STATES OF AMERICA), debited from her savings account No. 6358200500, and send to this Office, within a term of eight days, counted from the receipt of this official letter, the documentation that accredits the compliance with the present resolution (...)." (sic);

THAT through communication entered into the Regional Intendancy of Guayaquil on June 3, 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 Official Letter No. IRG-DAYEU-V-R-2014-393 of May 9, 2014, an appeal that was rejected through Official Letter No. IRG-DAYEU-V-R-2014-775 of July 14, 2014, in which the Regional Intendancy of Guayaquil ratifies the appealed administrative act;

THAT through writing received at the Superintendence of Banks on July 28, 2014, Mr. Antonio Acosta Espinosa, Adjunct President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo, and of the lawyer María José Araujo Álvarez, filed an appeal for review against Official Letter No. IRG-DAYEU-V-R-2014-775 of July 14, 2014;

THAT the arguments raised by the appellant are limited to the following:

• That the withdrawal subject of the complaint was made in an automated teller machine that does not belong to Banco Pichincha C.A., therefore the verification of the withdrawal was requested from Banco Bolivariano, so it is important to indicate that by confirmation of said financial institution, it was informed that the ATM dispensed the money successfully, so this constitutes irrefutable proof that the withdrawal was carried out correctly, for which reason the refund of the claimed value cannot be ordered;

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• That it is important to mention that by virtue of the fact that the automated teller machine in which the transaction subject of the complaint was made corresponds to Banco Bolivariano, it proceeded to request said institution to send the corresponding video; however, they indicated that the videos would be delivered only when the control body officiated directly to them with said information request;

• That in the face of the clear impossibility of sending the requested video, this is not an argument for the reimbursement of values to be instructed, so the foregoing does not weaken the responsibility of the client regarding the use of automated teller machines and the transactions that can be carried out through them;

• That the control body has not determined that the bank should introduce any corrective measures to regularize the situation that motivated the client's complaint, so no incorrect procedures regarding withdrawals through automated teller machines that would have caused harm to the complainant have been evidenced, for which reason the return of values cannot be ordered.

THAT through Official Letter No. JB-2014-2070 of August 4, 2014, the Secretary of the Banking Board accepted the aforementioned appeal for review to proceedings;

THAT Article 52 of the Constitution of the Republic establishes that people have the right to dispose of goods and services of optimal quality and to choose them freely, as well as to precise and non-misleading information about their content and characteristics, for which the law will establish the mechanisms of quality control and the procedures for the defense of consumers, and the sanctions for violation of these rights, in addition to contemplating repair and indemnification for deficiencies, damages, or poor quality of goods and services;

THAT Article 1 of the General Law of Institutions of the Financial System, in force at the date of presentation of the appeal, determines that the Superintendence of Banks was the entity in charge of supervising and controlling the financial system, in all that refers to the protection of the interests of the public, as well as to ensure the stability, solidity, and correct functioning of the institutions subject to its control; watching that they comply with the legal norms that govern them; and at the same time, to require that said institutions present and adopt the corresponding corrective measures when necessary;

THAT paragraph 4 of Article 4 of the Organic Law of Consumer Defense determines:

"Art. 4.- Consumer Rights.- Are consumer rights, in addition to those established in the Constitution of the Republic, treaties or international conventions, internal legislation, general principles of law, and commercial custom, the following:

(...)

4. Right to adequate, truthful, clear, timely, and complete information about the goods and services offered in the market, as well as their prices, characteristics, quality, contracting conditions, and other relevant aspects of them, including the risks they may present";

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THAT from the norm previously transcribed, it is inferred that financial institutions, when offering their financial products to their clients, are obligated to put at their service policies of dissemination of the conditions surrounding said products, including the security measures implemented and their possible risks when accessing said services through electronic channels other than their own;

THAT from the documentation that forms part of the file formed around the present appeal for review, and from the administrative acts issued by the Regional Intendancy of Guayaquil, it is appreciated that the disputed transaction was carried out on October 3, 2013, in an automated teller machine of Banco Bolivariano C.A. located in the Farmacia Victoria del Guasmo Sur, in the city of Guayaquil, for a value of US $ 80.50, and that the referred banking entity did not provide the videos where the images of the withdrawal carried out are recorded;

THAT it is necessary to mention that, the bank, upon receiving public funds, has the obligation of safeguarding the funds delivered to its custody, in order to return to the depositor the monetary equivalent deposited at the moment it is required, from which the responsibility of the client regarding the transactions they carry out through automated teller machines must be surrounded in parallel with physical and computer security;

THAT Banco Pichincha C.A. agreed with the client to use automated teller machines of other financial institutions, which were equipped with an interconnection system among themselves, such as "BANRED", or other electronic channels to return the funds entrusted to its custody, therefore, said bank had to evaluate and require that the ATMs enabled to deliver money from the ATM cards of their savings or checking accounts delivered to their clients, have the respective security measures in order to be able to comply with their obligations as depositary of the monies that their users have entrusted to them;

THAT among the controls and security measures that Banco Pichincha C.A. must take into account when offering services through electronic channels, is the issuing of timely alerts to avoid the possible commission of cybercrimes, therefore, financial institutions are obligated to put at the service of users policies of dissemination of the conditions surrounding the use of the same, including the security measures implemented and their possible risks when accessing said services, in this sense the cited bank cannot disclaim its responsibility over the integral control that minimizes the risk of exposure of its clients, nor the co-responsibility in the service offered by companies associated with the interbank payments network "BANRED";

THAT regarding the argument in which the bank mentions that in the face of the clear impossibility of sending the requested video, and that this is not an argument for the reimbursement of values to be instructed, it must be pointed out that in the file there is no document that evidences that the recurrent financial institution had requested the video of the automated teller machine from Banco Bolivariano C.A.;

THAT Article 5, chapter IV "Procedure for the attention of complaints against institutions of the financial system", title XX "Of the Superintendence of Banks and Insurance", 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 of the Banking Board, says:

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"ARTICLE 5.- If the result of the analysis carried out by the Superintendence determines the need for the controlled institution to introduce corrective measures that regularize the situation that motivated the complaint, the Superintendent of Banks and Insurance or the official who has the delegation of said authority, will issue the corresponding disposition.

If the situation that motivated the complaint referred to in the previous paragraph originated in an incorrect procedure of the controlled institution, which would have caused harm to the complainant, the Superintendence of Banks and Insurance may order the return of the claimed values, in exercise of the functions and attributions contemplated in letters b) and o) of article 180 of the General Law of Institutions of the Financial System, granting the legal representative of the entity a term that cannot exceed fifteen (15) days from the notification to send, under the legal warnings, the record of compliance with the order issued.

For complaints of unauthorized withdrawals due to evidence of attempts or frauds produced in automated teller machines, the Superintendence of Banks and Insurance will order the return of the claimed values to the institution issuing the credit card or where the client maintains their account, if said withdrawals originated in an incorrect procedure of the controlled institution, which may repeat against the institution owning or operating the automated teller machine due to whose defects or lack of security measures the fraud occurred";

THAT from the legal norms transcribed in previous paragraphs, 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 ensure the stability, solidity, and correct functioning of the institutions subject to its control; watch that they comply with the norms that govern them; and, require that said institutions present and adopt the corresponding corrective measures when necessary, likewise, if the control body determines incorrect procedures on the part of the controlled financial institutions, which would have caused harm to a complainant, it must act as ordered for those effects.

THAT it is evidenced that Banco Pichincha C.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 Superintendence of Banks and Insurance", 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 of the Banking Board, since the situation that motivated the complaint originated in an incorrect procedure, by not monitoring the clients' funds, and providing the respective security measures through the automated teller machines put at its service, without the bank having evidenced the responsibility of the client in said transaction;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0197 of March 9, 2015, recommended to the Banking Board to reject the claim contained in the appeal filed by the Adjunct President of Banco Pichincha C.A.;

AND,

IN exercise of its legal attributions,

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RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the appeal for review presented by Mr. Antonio Acosta Espinosa, Adjunct President of Banco Pichincha C.A. and, consequently CONFIRM the administrative act contained in Official Letter No. IRG-DAYEU-V-R-2014-775 of July 14, 2014, which ratifies Official Letter No. IRG-DAYEU-V-R-2014-393 of May 9, 2014, through which the Regional Intendancy of Guayaquil ordered Banco Pichincha C.A. to reintegrate to Ms. Mónica Evelyn Sánchez Zalamea the amount of USD $80.50.

NOTIFY.- Given at the Superintendence of Banks and Insurance, in Quito, Metropolitan District, on the twenty-second of April of two thousand fifteen.

Econ. Rodrigo Landeta Parra
GENERAL INTENDANT (S)
PRESIDENT OF THE BANKING BOARD SESSION (E)

I CERTIFY.- Quito, Metropolitan District, on the twenty-second of April of two thousand fifteen.

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD