Banking Board of Ecuador

RESOLUTION No. JB-2015-3355

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 it was handling on the date of entry into force of this 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 the "Free complaint form by users of entities controlled by the Superintendence of Banks and Insurance" dated December 4, 2013, Mr. Daniel Alberto Herrera Villao brought to the attention of this regulatory body the unauthorized withdrawals made in Quito with his credit card from Banco Internacional S.A. No. 4657753004601029, for which he requested the intervention of the regulatory body since he did not make the withdrawals as his place of residence is Guayaquil; and therefore, he should not be required to pay for them. The complaint presented was admitted for processing by lawyer Federico Sandoval Valverde, Director of User Attention and Education of the Regional Intendancy of Guayaquil, through letter No. DAYEU-ISFP-REQ-2013-1765, dated December 19, 2013, with which he requested information from Banco Internacional S.A. and the duly substantiated defenses regarding the complaint of Mr. Daniel Alberto Herrera Villao;

THAT through communication No. USC-134-2014, dated February 6, 2014, engineer Mónica Avilés A., Customer Service Manager of Banco Internacional S.A., informed lawyer Federico Sandoval Valverde, Director of User Attention and Education of the Regional Intendancy of Guayaquil, of the following:

• That the automated teller machines (ATMs) used by the client have not been reported as points of information compromise, which is why the card used for the transactions that are the subject of the complaint was not compromised; and that the blocking of credit card No. 4657753004601029 was carried out on October 10, 2013;

THAT through letter No. IRG-DAYEU-V-R-2014-384, dated May 14, 2014, lawyer Humberto Moya González, Regional Intendant of Guayaquil, accepted the complaint presented by Mr. Daniel Alberto Herrera Villao and ordered Banco Internacional S.A. to refund US$ 2,753.25 corresponding to twenty-nine unauthorized withdrawals from ATMs of his credit card No. 4657753004601029, from August 31 to October 9, 2013;

THAT through communication No. VJ-119-2014, dated May 29, 2014, entered in the Superintendence of Banks on the same date, doctor José Romero Soriano, Vice President and Legal Representative of Banco Internacional S.A., with the professional sponsorship of lawyer Sebastián López Proaño, under the protection of what is provided in article 137 of the General Law of Institutions of the Financial System, and of article 5, of section II, of chapter II, of Title XVI

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of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, filed an appeal for review against the content of letter No. IRG-DAYEU-V-R-2014-384, dated May 14, 2014;

THAT through letter No. JB-2014-1420, dated June 3, 2014, lawyer Juan Francisco Simone, then Secretary of the Banking Board, Acting, informed doctor José Romero Soriano, Vice President and Legal Representative of Banco Internacional S.A., that the appeal for review filed was accepted for processing, and extended the term to resolve it by an additional sixty days, and, through letter No. JB-2014-1421, dated June 3, 2014, informed Mr. Daniel Alberto Herrera Villao of the acceptance for processing of the appeal for review filed by Banco Internacional S.A.;

THAT according to article 213 of the Constitution of the Republic, the Superintendence of Banks and Insurance is the technical body for surveillance, auditing, intervention, and control of financial activities and services provided by public and private entities that are part of the national financial system, with the purpose that these activities and services are subject to the legal framework and attend to the general interest. In harmony with this fundamental norm, article 1 of the General Law of Institutions of the Financial System establishes that the Superintendence of Banks and Insurance is the entity in charge of the supervision and control of the financial system. Furthermore, financial activities are a service of public order and have the fundamental purpose of preserving public deposits;

THAT article 180, letters b) and o) of the General Law of Financial Institutions, which has an organic character, obliges the Superintendence of Banks and Insurance to ensure the stability, solidity, and correct functioning of institutions subject to its control; and in general that they comply with the norms governing their functioning, attributions that are exercised in the administrative sphere as provided in article 140 of the aforementioned legal body;

THAT article 6, of chapter IV "Procedure for the attention of complaints against institutions of the financial system", of Title XX "Of the Superintendence of Banks and Insurance" of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, states literally the following:

"ARTICLE 6.- (...) Complaints related to cases that, in parallel, are under the knowledge of the ordinary justice in criminal matters are exempt from the provisions of the previous paragraph, in which case the Superintendence of Banks and Insurance will know and resolve them, within the scope of its competence. (...)";

THAT according to the mentioned articles, the Superintendence of Banks and Insurance is constitutionally, legally, and normatively empowered to know and resolve, within the scope of its competence, cases that are under administrative processing;

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THAT in the credit card use contract, the parties agreed to comply with the agreed conditions that govern the legal-contractual relationship during its validity. Based on the above, the bank and Mr. Daniel Alberto Herrera Villao must comply with what was agreed, as provided in article 1561 of the Civil Code, which provides:

"Art. 1561.- Every contract legally celebrated is a law for the contracting parties, and cannot be invalidated except by their mutual consent or by legal causes.";

THAT it is not appropriate for Banco Internacional S.A. to attempt to disclaim its responsibility in the complaint presented, and for Mr. Daniel Alberto Herrera Villao to assume a detriment for facts that are caused by the cloning of his card, as evidenced in the video sent by the bank and recorded in the file;

THAT 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 Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, provides:

"ARTICLE 5.- If the result of the analysis carried out by the Superintendence determines the need for the controlled institution to introduce corrective measures to 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 caused damage 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 proof of compliance with the issued order.";

THAT consequently, and in application of what is provided in the aforementioned article 5 of the Codification of Resolutions indicated above, it corresponds for the regulatory body to order the return of the claimed value;

THAT from the review of the account statement, the withdrawals made with credit card No. 46577530046010259 are made in Quito and not in the city of Guayaquil, place of residence of Mr. Daniel Alberto Herrera Villao; however, in letter No. USC-134-2014, dated February 6, 2014, engineer Mónica Avilés A., Customer Service Manager of Banco Internacional S.A., states that the client used ATMs that have not been reported as

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points of information compromise, a reason that allows concluding that the credit card was not compromised, a situation that demonstrates internal control failures in the banking entity;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0117 of February 4, 2015, recommended to the Banking Board to reject the claim contained in the appeal for review filed;

AND IN exercise of its legal attributions,

RESOLVES:

ARTICLE ONE.- REJECT the appeal for review filed by doctor José Romero Soriano, Vice President and Legal Representative of Banco Internacional S.A.; and, consequently, CONFIRM the administrative act contained in letter No. IRG-DAYEU-V-R-2014-384, dated May 14, 2014, through which lawyer Humberto Moya González, Regional Intendant of Guayaquil, accepted the complaint presented by Mr. Daniel Alberto Herrera Villao and ordered Banco Internacional S.A. to refund US$ 2,753.25 corresponding to twenty-nine unauthorized withdrawals from ATMs of his credit card No. 4657753004601029, from August 31 to October 9, 2013.

NOTIFY.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the fifteenth of April of two thousand fifteen.

Econ. Rodrigo Landeta Parra GENERAL INTENDANT, S PRESIDENT OF THE BANKING BOARD, E

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

Lcdo. Pablo Gobo Luna SECRETARY OF THE BANKING BOARD