Resolution No. JB-2015-3461 of the Banking Board of Ecuador

Banking Board of Ecuador

RESOLUTION No. JB-2015-3461

THE BANKING BOARD

CONSIDERING:

THAT the second paragraph of the Third Transitional Provision of the Organic Code of Monetary and Financial Law determines that the Banking Board will continue to act until it resolves all claims, appeals, and other administrative procedures that it was hearing as of the date of entry into force of that Code, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT by means of a document received at the Regional Intendancy of Guayaquil on April 15, 2014, Mrs. Bélgica Susana Carriel Fuentes filed a claim against Banco Nacional de Fomento regarding unusual withdrawals from savings account No. 0230251314, which she owns, made through ATMs in the amount of US$ 362.00;

THAT the lawyer Federico Sandoval Valverde, Director of User Attention and Education at the Regional Intendancy of Guayaquil, through Official Letter No. DAYEU-ISFP-REQ-2014-765 of April 22, 2014, admitted the claim filed by Mrs. Bélgica Susana Carriel Fuentes to proceedings; additionally, explanations regarding the claim filed by Mrs. Bélgica Susana Carriel Fuentes were requested from Banco Nacional de Fomento;

THAT by means of Official Letter No. 04715 of May 19, 2014, received at the Regional Intendancy of Guayaquil on the 20th of the same month and year, the engineer Marco Ruales Valverde, Director of the Customer Attention Unit of Banco Nacional de Fomento, in response to the requirement of the control body, stated that the withdrawals made in the account of Mrs. Bélgica Susana Carriel Fuentes were due to the lack of application of basic security recommendations for the handling of the debit card;

THAT by means of Official Letter No. IRG-DAyEU-V-R-2014-561 of June 10, 2014, the lawyer Humberto Moya González, Regional Intendant of Guayaquil, accepted the claim filed by Mrs. Bélgica Susana Carriel Fuentes and ordered Banco Nacional de Fomento to refund US$ 362.00 to savings account No. 0230251314 for the unauthorized withdrawals made through ATMs of the Network;

THAT by means of communication entered at the Regional Intendancy of Guayaquil on June 30, 2014, Banco Nacional de Fomento filed an appeal for reconsideration against the content of Official Letter No. IRG-DAyEU-V-R-2014-561 of June 10, 2014, which was rejected through Official Letter No. IRG-DAyEU-V-R-2014-836 of July 30, 2014, since the bank did not provide documentary evidence or new information regarding the merits of the administrative claim matter, that would change the circumstances under which the appealed letter was issued;

THAT on August 13, 2014, Master Ángela Mercedes Avilés Gómez, Commercial Manager of Banco Nacional de Fomento, Acting – Guayaquil Branch, with the professional sponsorship of lawyer Nicolás Rodríguez Campos, under the protection of what is provided in article 137 of the General Law of Financial System Institutions and in article 6, of chapter II “Norms for the application of appeals for reconsideration and review in matters related to the financial system and the social security system; and, of appeal in private insurance matters, regarding administrative acts of the Superintendence of Banks and Insurance”, of title XVI “Of sanctions and of resources in the administrative venue” of book I “General norms for the application of the General Law of Financial System Institutions” of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, filed an appeal for review against the content of resolution No. IRG-DAyEU-V-R-2014-836 of July 30, 2014;

THAT by means of Official Letter No. JB-2014-2211 of August 15, 2014, the lawyer Juan Francisco Simone Lasso, Secretary of the Banking Board (s), accepted the appeal for review filed by Master Ángela Mercedes Avilés Gómez, Commercial Manager of Banco Nacional de Fomento, Acting – Guayaquil Branch, against the content of Official Letter No. IRG-DAyEU-V-R-2014-836 of July 30, 2014; and, through Official Letter No. JB-2014-2212 of August 15, 2014, informed Mrs. Bélgica Susana Carriel Fuentes of the appeal for review filed;

THAT regarding the appellant's allegation that Official Letter No. IRG-DAyEU-V-R-2014-836 of July 30, 2014, violates the principle of legal certainty provided in the Constitution of the Republic of Ecuador, it should be indicated that Official Letter No. IRG-DAyEU-V-R-2014-561 of June 10, 2014, being motivated, that is, explaining in a reasoned and exhaustive manner the link between the decision adopted by the Regional Intendancy of Guayaquil, the factual background, and the legal norms, allows the principle of legal certainty to be made effective and ensures the right to defense, as provided in numeral 7, letter I) of article 76 of the Constitution of the Republic of Ecuador;

THAT Official Letter No. IRG-DAyEU-V-R-2014-836 of July 30, 2014, contains all and each of the constitutional norms that guarantee due process provided in article 76 of the Constitution of the Republic of Ecuador, whose first paragraph was transcribed above, in addition, from the review of the file it has been verified that Banco Nacional de Fomento exposed, before the requirements of the control body, the defenses it considered pertinent before the Superintendence of Banks and Insurance, and exercised its right to defense;

THAT article 52 and numeral 25 of article 66 of the Constitution of the Republic of Ecuador, provide as follows:

“Art. 52.- Persons have the right to dispose of goods and services of optimal quality and to choose them freely, as well as to receive precise and non-misleading information about their content and characteristics.

The law will establish the mechanisms for quality control and the procedures for defense of consumers; and the sanctions for violation of these rights, the repair and indemnification for deficiencies, damages or poor quality of goods and services, and for the interruption of public services that was not caused by fortuitous event or force majeure.”

“Art. 66.- It is recognized and guaranteed to persons:

(...)

25. The right to access public and private goods and services of quality, with efficiency, effectiveness and good treatment, as well as to receive adequate and truthful information about their content and characteristics.

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Banking Board of Ecuador Resolution No. JB-2015-3461 Page 3

(...)”;

THAT numeral 9.6 of article 9 of paragraph II “Right to information on financial products and services”, of chapter V “Code of user rights of the financial system”, of title XIV “Code of Transparency and User Rights”, of book I “General norms for the application of the General Law of Financial System Institutions”, of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board”, establishes as follows:

“ARTICLE 9.- Access and receive directly clear, precise, timely, reasonable, adequate, validated, truthful and complete information, related to the products and services offered by financial system institutions, especially in financial, legal, juridical, operational, fiscal and commercial aspects, among others, including their associated risks:

(...)

9.6 Receive clear, non-misleading advertising that does not induce error, which collects the necessary, complete and adequate conditions of the advertised product or service. Advertising will have binding force when contracts or agreements are agreed upon based on the advertising offer; and,

(...)”;

THAT in turn, letter b) of article 180 of the General Law of Financial System Institutions, among the functions of the Superintendent of Banks, provides that it must ensure the stability, solidity and correct functioning of institutions subject to its control;

THAT numerales 2 and 4 of article 4 of the Organic Law for Consumer Defense, establish that fundamental rights of the consumer are that public and private providers offer competitive goods and services of optimal quality, and to choose them freely, and to receive 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;

THAT the Superintendence of Banks and Insurance, a technical entity for surveillance, auditing, intervention and control of economic activities, and of the services provided by private entities, with the purpose that these activities and services are subject to the legal framework and attend to the general interest, according to what is provided in article 213 of the Constitution of the Republic of Ecuador, it is appropriate that the control body observes Banco Nacional de Fomento so that the services provided to the client are of optimal quality, which can also be chosen freely; therefore, the provision of refund of values by the Superintendence of Banks is appropriate;

THAT what was stated above is corroborated by the fact that the interest of the public must be protected by the Superintendence of Banks and Insurance, according to the first paragraph of article 1 of the General Law of Financial System Institutions, which textually provides as follows:

“Art. 1.- This Law regulates the creation, organization, activities, functioning and

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Banking Board of Ecuador Resolution No. JB-2015-3461 Page 4

extinction of private financial system institutions, as well as the organization and functions of the Superintendence of Banks, entity in charge of the supervision and control of the financial system, in all of which the protection of public interests is taken into account.

(...)”;

THAT the appellant's assertion that the withdrawals made through ATMs were made with the passwords and with debit card No. 6031600088030841, the exclusive responsibility of Mrs. Bélgica Susana Carriel Fuentes, is not appropriate, since according to letter a) of article 51 of the General Law of Financial System Institutions, which is transcribed below, Banco Nacional de Fomento is the depositary of its clients' money and is also responsible for the coverage services offered through ATMs of the Network, whose operational risk cannot be transferred to the clients of the country's banking entities, since it is its obligation to require that they have the necessary security measures:

“Art. 51.- Banks may carry out the following operations in national or foreign currency, or in accounting units established in the Law:

a) Receive public resources in demand deposits. Demand deposits are banking obligations, comprise monetary deposits payable upon presentation of checks or other payment and registration mechanisms; savings deposits payable upon presentation of savings books or other payment and registration mechanisms; and, any other payable within a period of less than thirty days. They may be constituted under various modalities and mechanisms freely agreed upon between the depositor and the depositary;

(...)”;

THAT the Banking Board issued the regulations inherent to the presentation of claims against controlled institutions, currently contained in section I, chapter IV, title XX, book I of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, whose article 5 in its second paragraph establishes:

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

THAT there is no evidence that allows affirming that the holder of savings account No. 0230251314, Mrs. Bélgica Susana Carriel Fuentes, has failed to comply with her preventive obligations in the use of passwords and debit card No. 6031600088030841, since Banco Nacional de Fomento itself stated that the withdrawals present an atypical transactional scheme and that they could have been exposed to third-party manipulation;

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Banking Board of Ecuador Resolution No. JB-2015-3461 Page 5

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0115 of February 4, 2015, recommended to the Banking Board to reject the claim contained in the appeal filed by the Commercial Manager of Banco Nacional de Fomento, acting – Guayaquil Branch; and,

IN exercise of its legal attributions,

RESOLVES:

ARTICLE ONE.- REJECT the claim contained in the appeal for review filed by Master Ángela Mercedes Avilés Gómez, Commercial Manager of Banco Nacional de Fomento, acting – Guayaquil Branch; and, consequently, CONFIRM Official Letter No. IRG-DAyEU-V-R-2014-836 of July 30, 2014, through which the appeal for reconsideration against the content of Official Letter No. IRG-DAyEU-V-R-2014-561 of June 10, 2014, was ratified, with which the lawyer Humberto Moya González, Regional Intendant of Guayaquil, accepted the claim filed by Mrs. Bélgica Susana Carriel Fuentes and ordered Banco Nacional de Fomento to refund US$ 362.00 to savings account No. 0230251314 for the unauthorized withdrawals made through ATMs of the Network.

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

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

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

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

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Banking Board of Ecuador