Banking Board of Ecuador

RESOLUTION No. JB-2015-3377

THE BANKING BOARD

CONSIDERING:

THAT the second paragraph of the Third Transitory Provision of the Organic Monetary and Financial Code determines that the Banking Board will continue to act until it resolves all claims, appeals, and other administrative procedures it was handling 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 through a communication entered into the Superintendency of Banks on January 13, 2014, Mr. Segundo Reinaldo López Echeverría filed a claim against Banco Pichincha C.A., in the following terms:

"(...) In the month of June of the year 2013, I received a call on my mobile phone from a person who identified themselves as a sales agent for the insurance company WESTMINSTER INSURANCE GROUP, who insistently and persuasively offered me an insurance contract, for which monthly contributions of US$ 50.00 were required as the policyholder, through bank debits from my Banco Pichincha Visa Card No. 4514320003969105, indicating additionally that I could withdraw the money in the month of December of the year 2013. This call, which lasted five minutes, was not positively and concretely accepted by me, to the extent that in the days following the product offer call, I received a copy of the contract which has not been signed by me; however, starting from the month of June 2013, monthly debits of US$50.00 were made on my Banco Pichincha Visa Card No. 4514320003969105.

(...)

For the background and grounds stated precisely, I (SIC) request the following:

That you kindly order the debits of US$ 50.00 per month being made on my Banco Pichincha Visa Card No. 4514320003969105 to be voided, as I have not authorized them to WESTMINSTER INSURANCE GROUP (...);"

THAT through Official Letter No. IRG-DAYEU-V-R-2014-647 of June 24, 2014, Dr. Faddul Mosquera Karam, then Acting Regional Intendant of Guayaquil, resolved the administrative claim in question in the following terms:

"PARTIALLY ACCEPT the claim presented by Mr. SEGUNDO REINALDO LÓPEZ ECHEVERRÍA, with citizenship ID No. 0904330685, against the controlled financial institution BANCO PICHINCHA C.A.

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ORDER the financial institution BANCO PICHINCHA C.A. to SUSPEND all debits for the concept of the Westminster Insurance Group Full Life Insurance that has been made against the Visa International Credit Card of Banco Pichincha C.A. No. 4514320003969105, whose holder is Mr. Segundo Reinaldo López Echeverría.

DO NOT ACCEPT the claim presented by Mr. SEGUNDO REINALDO LÓPEZ ECHEVERRÍA, with citizenship ID No. 090433068, against the controlled financial institution BANCO PICHINCHA C.A. regarding the refund of debits for the contracting of the Westminster Insurance Group Full Life Insurance, since the claimant accepted the debits for this concept (...);

THAT through a communication entered into the Superintendency of Banks on July 7, 2014, lawyer María Elena Franco San Lucas, Judicial Attorney of Banco Pichincha C.A., filed an appeal for reconsideration against Official Letter No. IRG-DAYEU-V-R-2014-647 of June 24, 2014. The request of the appeal for reconsideration was rejected with Official Letter No. IRG-DAYEU-V-R-2014-912 of August 22, 2014;

THAT with a document entered into the Superintendency of Banks on September 2, 2014, Mr. Antonio Acosta Espinosa, Adjunct President of Banco Pichincha C.A., filed before the Banking Board an appeal for review against Official Letter No. IRG-DAYEU-V-R-2014-912 of August 22, 2014;

THAT Article 52 of the Constitution of the Republic of Ecuador provides as follows:

"Article 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 (...);"

THAT Article 4, numbers 2 and 10, of the Organic Law for Consumer Defense provides as follows:

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

(...)

2. Right to have public and private providers offer competitive goods and services of optimal quality, and to choose them freely; 3. Right to receive basic services of optimal quality;

(...)

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10. Right to access effective mechanisms for the administrative and judicial protection of their rights and legitimate interests, which lead to the adequate prevention, sanction, and timely repair of their injury;

(...);

THAT the administrative claim of January 13, 2014, presented by Mr. Segundo Reinaldo López Echeverría against Banco Pichincha C.A., sought, on the one hand, the restitution of charges made to the Visa Banco Pichincha Credit Card No. 4514320003969105, which he holds, between the months of June and November 2013, arguing that he did not authorize the charges related to the private insurance offered by Westminster Insurance Group. Regarding this request, with Official Letters Nos. IRG-DAYEU-V-R-2014-647 and IRG-DAYEU-V-R-2014-912, of June 24 and August 22, 2014, the Regional Intendency of Guayaquil maintained the criterion that no incorrect procedure was evidenced in the Bank's management regarding the referred charges, and therefore resolved to reject the request for restitution of values;

THAT in virtue of this, the appellant's request to the effect that Official Letter No. IRG-DAYEU-V-R-2014-912 of August 22, 2014, be voided, with which the restitution of values in favor of Mr. Segundo Reinaldo López Echeverría would have been ordered, lacks factual and legal basis, since the Superintendency of Banks never disposed of such a thing. Quite the contrary, it ratified the Bank's criterion that the procedures provided for in the current legal framework were complied with to authorize the charge in question. This decision was based on the same contract for the issuance of the credit card, and therefore the argument that the administrative act lacks motivation also lacks legal basis;

THAT on the other hand, Mr. Segundo Reinaldo López Echeverría also demands that Banco Pichincha C.A. void any future charges for services offered by Westminster Insurance Group, to which the financial institution, through Official Letter No. AUD-C-R-026-2014, stated: "(...) Additionally, we must mention that from the month of December 2013 until February, there is no evidence in the client's statements that he was debited for the charge he is currently claiming (...)". In this line, the right of the financial user, in the person of the claimant, to benefit from the services freely accepted must be highlighted; it must also be considered that in the present case, with the mere filing of the administrative claim of January 13, 2014, the user expressly rejects the services offered by Westminster Insurance Group, against which the suspension of the referred charge is appropriate, and therefore it corresponds to ratify Official Letter No. IRG-DAYEU-V-R-2014-912 of August 22, 2014, to the effect of ordering Banco Pichincha C.A. to refrain from continuing to make such charges to the Visa Banco Pichincha C.A. Credit Card held by Mr. Segundo Reinaldo López Echeverría;

THAT the National Legal Intendency, through memorandum INJ-DNJ-SAL-2015-0222 of March 16, 2015, recommended to the Banking Board to reject the request

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contained in the appeal filed by the Adjunct President of Banco Pichincha C.A.; and,

In exercise of its legal powers,

RESOLVES:

SINGLE ARTICLE.- REJECT the request contained in the appeal for review filed; and, consequently, CONFIRM Official Letter No. IRG-DAYEU-V-R-2014-912, of August 22, 2014, with which Official Letter No. IRG-DAYEU-V-R-2014-647 of June 24, 2014, was ratified.

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

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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