Banking Board of Ecuador

Resolution No. JB-2015-3373

THE BANKING BOARD

CONSIDERING:

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 contained in the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, and norms issued by control bodies, will remain in effect in all that does not oppose what is provided 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 claims, appeals, and other administrative procedures 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 from the aforementioned provisions, it is established that the Banking Board is competent to resolve the present review appeal;

THAT through a communication entered into the Superintendence of Banks and Insurance on February 19, 2014, Mrs. Shirley Karla Capelo Hidalgo filed a complaint against Diners Club del Ecuador S.A., Financial Society, for charges she claims she did not make, which amounted to the sum of USD 975.65, in the following terms: "(...) on January 20 of the current year, my wallet was stolen, in which I had all my personal documents, including my credit card, (...) I proceeded to report the incident to the call center of said institution for blocking, however several purchases had already been made (...) with the respective complaint filed with the Attorney General's Office in the early hours of the following day, I went to the central offices of that entity to formalize the complaint, in which I asked that an investigation of purchases and verification of signatures of the merchants be carried out, since the locations that made said payment authorizations did not follow the correct procedure in validating the documents and signature, but on February 14, 2014, they gave me the written response in which they indicated that they ratified the value to pay, a document to which I attach a copy for analysis.

For this reason, as I am not responsible for these charges, I request that the corresponding investigations be carried out so that the values generated, for which I was a subject of fraud, are forgiven, demanding that each commercial establishment assume its responsibility, as there is proof of the incident that is causing me economic harm";

THAT the Deputy Director of User Attention, through letter No. DNAE-SAU-2014-01367 of February 28, 2014, requested Diners Club del Ecuador S.A. to send the pertinent explanations and defenses;

THAT through letter No. GN-GCRP-017-14, received by the control body on March 18, 2014, the Head of Customer Service, of Diners Club del Ecuador S.A., sent the information required by the control body;

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THAT with letter No. DNAE-SAU-2014-02230 of April 14, 2014, the Acting Deputy Director of User Attention, resolved the following: "1.- (...), on the merits of the present administrative act which is duly motivated, as provided by letter l) of numeral 7, of article 76 of the Constitution of the Republic of Ecuador, I order that within seventy-two (72) hours, counted from the receipt of the present letter, the bank refund the value of USD$975.65 (Nine hundred seventy-five United States dollars and 65/100) to Mrs. Shirley Karla Capelo Hidalgo, (...)";

THAT through a document received by the Superintendence of Banks and Insurance on April 28, 2014, Diners Club del Ecuador S.A. filed a request for reconsideration against letter No. DNAE-SAU-2014-02230 of April 14, 2014;

THAT the Acting Deputy Director of User Attention, with letter No. DNAE-SAU-2014-04493 of July 21, 2014, stated that "since no additional elements were found that modify the challenged resolution, it ratifies the provision contained in letter No. DNAE-SAU-2014-02230 of April 14, 2014, consequently denying the request for reconsideration proposed";

THAT through a document received by the Superintendence of Banks and Insurance on August 1, 2014, Mr. Jorge Moyano Aguilar, Special Representative of Diners Club del Ecuador S.A. with the professional sponsorship of lawyer Francisco Pereira, filed a review appeal before the Banking Board, against letter No. DNAE-SAU-2014-04493 of July 21, 2014, in the following terms: that "Administrative acts emanating from public administration must be motivated, explaining the pertinence of their application to the antecedents of the fact, in accordance with letter l, of article 76 of the Constitution of the Republic; in the challenged Resolution, besides not resolving on what was requested (CLARIFICATION), the Deputy Director of User Attention (E), in the analysis part of Letter DNAE-SAU-2014-04493, transcribes in its entirety and cites as elements supporting its resolution, numeral 15.2 of article 15, chapter V, Title I of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, which in the pertinent part establishes that the establishment "shall require" the presentation of identification documents when issuing the charge slip in credit card transactions; forgetting that the aforementioned norm is not applicable to the case, since the legal provision applicable at the time the facts subject of the controversy occurred stated that only in "case of doubt" the establishment must require the presentation of the identification document. With the aforementioned, it is evident that the Deputy Director of User Attention (E) takes into account for resolution, a norm that is not applicable to the case, since by legal principle, the law only provides for the future"; that chapter II, title XVI, book I, of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board establishes the guidelines to be followed to file the review appeal before the Banking Board and on that basis, in addition to citing the treatise writer Patricio Secaira D. who comments, "(...) the administrator has the legal faculty to claim, to challenge resolutions that do not favor him", considers that there are sufficient elements for the Banking Board to attend positively to the present appeal;

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THAT with letter No. JB-2014-2126 of August 11, 2014, the lawyer Juan Francisco Simone Lasso, Secretary of the Banking Board, acting, accepted the review appeal filed for processing, and with letter No. JB-2014-2127, of the same date, made the matter known to Mrs. Shirley Carla Capelo Hidalgo;

THAT article 1, in concordance with articles 180, letters b) and o) of the General Law of Institutions of the Financial System, assigned to the Superintendence of Banks and Insurance, within the scope of its competence, the supervision and control of the financial system, keeping in mind the protection of the interests of the public, and requiring that controlled institutions present and adopt the corresponding corrective measures;

THAT the Banking Board, with the purpose of achieving effective compliance with the provisions emanating from both the control body and the collegiate body, integrated into chapter IV, of title XX, of Book I, of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, the procedure for the attention of claims against institutions of the financial system, always attentive to the protection of the interests of the public according to law, in whose article 5 it establishes that 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 his delegate will issue the corresponding disposition. Likewise, if the situation that motivated the complaint 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, granting the legal representative of the entity a period that cannot exceed fifteen (15) days from the notification to send, under the legal warnings, the proof of compliance with the order issued;

THAT numeral 13.9, of chapter V "Constitution, functioning and operations of credit card issuing or administering companies 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 Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, determines the conditions related to the loss, theft, or deterioration of the credit card. If any of these cases occur, the cardholder, duly identified by full names, national identity or citizenship number, and card number, must notify the issuer of the particular, the first being not responsible, from that moment on, for the charges made against the card reported as lost or stolen. The notification can be made in writing or by phone, in which case the magnetic message will constitute means of proof, according to what is provided in article 125 of the Code of Civil Procedure. The notification made by phone must be ratified in writing within the term of 48 hours;

THAT Diners Club del Ecuador, in letter No. GN-GCRP-017-14 of March 17, 2014, informed that the Diners credit card No. 3602XXXXXXXX1915, at the request

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of Mrs. Shirley Karla Capelo was blocked as lost on January 20, 2014, at 18:09; and, detailed the following transactions resulting from the complaint:

DATE	TIME	ESTABLISHMENT	USD VALUE
20/01/2014	16:15:43	MODA INTERNACIONAL	154,00
20/01/2014	16:40:31	ADIDAS	142,25
20/01/2014	16:52:44	MAKE UP	179,72
20/01/2014	17:04:59	FOSIL	330,68
20/01/2014	17:14:29	JOYERÍA CUENCA	169,00
		TOTAL	975,65

THAT the aforementioned description verifies that the transactions were made before the time and date of the credit card blocking requested by the cardholder, that is, the warning to Diners Club S.A. to refrain from paying the charges was made at 18:11. Analyzing this information, since it involves several consecutive charges, on the same day, the establishments request authorizations from the respective issuer, a detail not observed in the file;

THAT from page twenty-one of the file, it is appreciated that on the same day January 20, 2014, at 19:40 and 19:41, that is, after the blocking due to loss of the card, two rejected transactions were recorded, which the system categorized as "Medium Risk", without any observation derived from a transaction that had as an antecedent a card reported as stolen, and as a security practice, to prevent the card from continuing to circulate;

THAT regarding the signatures on the vouchers, which have not been assumed by the cardholder as hers, numeral 15.2 of article 15, chapter V, title I, book I of the Compilation, ibidem, norm in force at the date of the event, states that institutions authorized to issue or administer credit, payment, or affinity cards, must sign written contracts with affiliated establishments, in which it will be stipulated the obligation of the establishment to issue the charge slip and to verify that the signature and rubric that the cardholder signs is the same as that on the back of the card; and that in case of doubt, the establishment will require the identification document and note on the receipt the number of the identity card or passport, that is to say, that the credit card is a means of payment with the sole presentation of the same; nevertheless, affiliated commercial establishments have the contractual obligation with credit card issuers or administrators to carry out the respective verifications, for security in sales;

THAT in the five vouchers, object of the complaint, a signature is recorded, and in four of them there is no annotation of the national identity number and phone number, from which it is deduced that the establishments at the time of the charge did not have the documents to confront the identity of the consumer, taking into account that at first sight a notable disagreement is observed between each of the vouchers with the identity card of the cardholder; nevertheless, under the signature of the charge slip, the document states "THE ESTABLISHMENT CERTIFIES THAT THE CLIENT'S SIGNATURE IS

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AUTHENTIC", in such a way that it is not within the competence of the control body to rule on the legitimacy of the signature, but to verify that Diners Club del Ecuador S.A. for the provision of a financial product, complies with what is provided in the current regulations, based on the contractual link agreed upon both with cardholders and with affiliated establishments;

THAT although the cardholder assumes contractual responsibilities, it also corresponds to the issuer and/or administrator of the credit card, in this case Diners Club del Ecuador S.A., regarding the security measures to prevent establishments with which it in turn signs affiliation contracts from having safe sale policies, so that charge slips or vouchers backing the consumption reflect legitimate transactions, among them, the verification of the cardholder's identity; in such a way that Diners Club del Ecuador S.A. has not disproven the circumstances that motivated the issuance of the challenged letter, although it tries to disclaim its responsibility contracted with the cardholder alleging lack of clarity in the challenged resolution, insofar as the contractual relationship that links the issuer and the affiliated establishments is not integrated by the cardholder, that is, upon verifying non-observance by the commercial establishment in the safe sale process, this will respond to the issuer and/or credit card administrator;

THAT in the present case, Diners Club del Ecuador S.A. has not analyzed the notable difference of the signature on the charge slip (voucher) sent by the establishments, compared to the identification document of the cardholder; nor does it mention having verified said signature with the signature recorded in the card issuance contract, in order that, based on the stipulations of the affiliation contract with the establishments, it refrains from paying the charges in dispute;

THAT for the aforementioned reasons, the premise of article 5 of chapter IV "Procedure for the attention of claims 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 the Banking Board has been fulfilled in the present case, having determined an incorrect procedure on the part of Diners Club del Ecuador S.A. for not applying in the affiliated establishments, contractually linked with the aforementioned Financial Society, the safe purchase procedures in the claimed transactions;

THAT the National Legal Intendency, through memorandum INJ-DNJ-SAL-2014-1077 of December 31, 2014, recommended to the Banking Board to reject the claim contained in the appeal filed by the Special Representative of Diners Club del Ecuador S.A. Financial Society; and,

IN exercise of its legal attributes,

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RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the review appeal filed by Mr. Jorge Moyano, Special Representative of Diners Club del Ecuador S.A. Financial Society; and, consequently, CONFIRM the administrative act contained in letter No. DNAE-SAU-2014-04493 of July 21, 2014, through which the Deputy Director of User Attention ratified letter No. DNAE-SAU-2014-02230 of April 14, 2014, with which, Diners Club del Ecuador S.A. was ordered to "refund the value of USD$ 975.65 (Nine hundred seventy-five United States dollars and 65/100) to Mrs. Shirley Karla Capelo Hidalgo (...)".

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 INTENDENT (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 Gobo Luna
SECRETARY OF THE BANKING BOARD