Banking Board of Ecuador

RESOLUTION No. JB-2015-3336

THE BANKING BOARD

CONSIDERING:

THAT by Resolution No. JB-2015-3223 of January 14, 2015, the Banking Board resolved: “REJECT the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A.; and, consequently CONFIRM the letter No. IRG-DAYEU-V-R-2014-160 of March 11, 2014, which ratified the letter No. IRG-DAYEU-V-R-2013-617 of December 10, 2013, through which the Regional Intendancy of Guayaquil ordered BANCO PICHINCHA C.A. to refund to Mrs. SOFÍA DANIELA SIERRA PEÑARANDA the sum of US$ 778.95, plus the interest improperly charged to the VISA credit card No. 4454-4600-0020-3843 issued by Banco Pichincha C.A. in favor of the claimant, corresponding to the disputed transaction carried out on February 2, 2013, at the establishment named 'POINT TECHNOLOGY', as well as to proceed to eliminate the historical information reported in the Risk Central related to such consumption”, fundamentally for the following considerations:

“(...)

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 the resolutions recorded in the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, and the norms issued by the control bodies, will maintain their validity in everything that does not oppose what is established 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 complaints, appeals, and other administrative procedures that it was handling on the date of validity of the same, within a period of one hundred eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT on April 2, 2013, Mrs. SOFÍA DANIELA SIERRA PEÑARANDA, filed a complaint with the control body against BANCO PICHINCHA C.A., through which she requested that the aforementioned banking institution be ordered to return US$ 778.95 corresponding to a non-occurring consumption, and charged to her VISA credit card No. 4454-4600-0020-3843, basing her complaint on: a) On January 26, 2013, her VISA credit card was lost, and on February 2, 2013, a consumption for the sum of US$ 778.95 was made, which was not done by Mrs. Sofía Daniela Sierra Peñaranda; b) That she reported the loss of her credit card to the aforementioned financial entity; and, c) That the signature and name appearing on the charge slip for the purchase made do not correspond to the signature of the claimant;

THAT by letter No. IRG-DAYEU-ISFP-REO-2013-432 of April 16, 2013, the full content of the complaint filed against the aforementioned bank was transferred to it, granting it a term of 15 days to present the pertinent explanations and defenses;

THAT by letters Nos. BP-ACEC-2013-0544 and BP-ACEC-2013-0650, received by this control body on May 30, 2013, and July 11, 2013, respectively, BANCO PICHINCHA C.A. presented the explanations and defenses related to the

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claim presented by Mrs. Sofía Daniela Sierra Peñaranda, basing its action, mainly, on the following:

“(...) The consumption subject of the complaint was made while the card was active and under the custody of the client, according to the following detail:

Date	Establishment	Value in USD
02/02/2013	POINT TECHNOLOGY	778.95

In this sense, it is important to mention that according to our records, the credit card No. 4454XXXXXXXX3843 was blocked on February 18, 2013, at 11:06 AM, that is, after the date of the claimed consumption. (...)

The Bank is not responsible for the consumption made while the credit card is active and under the custody of the client; moreover, as in the case at hand, if the client states that she realized she did not have her card after several days.”;

THAT furthermore, the aforementioned financial institution, to justify its denial, presents documentary defenses, the main ones being: a) Copy of the contract for the issuance and use of the credit card "VISA - Banco Pichincha" and/or "Mastercard - Banco Pichincha" duly signed by the parties; b) Copy of the credit card statements for VISA No. 4454-4600-0020-3843; c) Copy of the charge slip for the disputed consumption;

THAT by letter No. IRG-DAYEU-V-R-2013-617 of December 10, 2013, the Regional Intendancy of Guayaquil, accepted the claimant's request, resolving to order BANCO PICHINCHA C.A. to refund to Mrs. SOFÍA DANIELA SIERRA PEÑARANDA the sum of US$ 778.95, plus the interest improperly charged to the VISA credit card No. 4454-4600-0020-3843 issued by Banco Pichincha C.A. in favor of the claimant, corresponding to the disputed transaction carried out on February 2, 2013, at the establishment named 'POINT TECHNOLOGY', as well as to proceed to eliminate the historical information reported in the Risk Central related to such consumption;

THAT by communication received by this control body on December 23, 2013, BANCO PICHINCHA C.A., filed a request for reconsideration against the administrative act contained in letter No. IRG-DAYEU-V-R-2013-617 of December 10, 2013; and by letter No. IRG-DAYEU-V-R-2014-160 of March 11, 2014, the Regional Intendancy of Guayaquil resolved to confirm the administrative act contained in letter No. IRG-DAYEU-V-R-2013-617 of December 10, 2013, for the motivation stated therein;

THAT by writing entered into this Superintendence on March 24, 2014, Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo and lawyer María José Araujo Álvarez, filed before the Banking Board a review appeal against the administrative act contained in letter No. IRG-DAYEU-V-R-2014-160 of March 11, 2014, which was accepted for processing by Lic. Pablo Cobo Luna, Secretary of the Banking Board, by letter No. JB-2014-733 of April 3, 2014;

THAT the appellant argues that it is the contractual responsibility of the client to keep custody of their credit card, according to the conditions of its granting; if the blocking request was made after the disputed consumption, the responsibility for it lies with the client and cannot be attributed to the bank; That it is evident the non-responsibility of Banco Pichincha C.A., since it has not acted negligently in making the payment corresponding to the disputed consumption, since

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according to what is referred to in the Commercial Contract of Affiliation of Establishments, legally and duly signed by 'POINT TECHNOLOGY', it is their obligation to verify the identity of the cardholder, confronting the signature that appears there with the signature that is stamped on the charge slip (voucher) at the time of the transaction; That the bank has not incurred in incorrect procedures that originated the complaint of Mrs. Sofía Daniela Sierra Peñaranda, nor has the control body in its analysis seen it necessary to determine the introduction of any type of corrective measure, therefore, under no consideration should the restitution of values be ordered;

THAT from the review of the documents that make up this case, it is evident that Mrs. Sofía Daniela Sierra Peñaranda, holder of the VISA credit card No. 4454-4600-0020-3843, filed a complaint regarding dissatisfaction with her statement of account on February 20, 2013, with Banco Pichincha C.A., after being notified with the same on February 15, 2013, having blocked her card on February 18, 2013;

THAT in this regard, it is necessary to cite paragraphs 10.1 and 10.2 of clause tenth of the "CONTRACT FOR THE ISSUANCE AND USE OF THE CREDIT CARD 'VISA - BANCO PICHINCHA' and/or 'MASTERCARD - BANCO PICHINCHA'" which state:

"TENTH: OF COMPLAINTS REGARDING DISSATISFACTION WITH THE STATEMENT OF ACCOUNT.-

10.1 Once the monthly statement of account has been reviewed in the electronic medium defined by the Bank, the Cardholder may formulate in writing a complaint to THE FINANCIAL INSTITUTION and/or ISSUER regarding the same and its content, particularly regarding the value of the balances, corresponding to consumptions in Ecuador and abroad.

10.2 If no complaint is filed within the 15 calendar days following the statement date, it is presumed that the Cardholder reviewed the statement of account, that they are satisfied with its content, and that the registered balance is correct, therefore THE FINANCIAL INSTITUTION and/or ISSUER is authorized to demand payment of the outstanding obligations based on the respective statements of account and/or accounting entries."

THAT paragraphs 15.1 and 15.2 of Article 15, of Chapter V "Constitution, Functioning and Operations of Issuing or Administering Credit Card Companies and Credit Card Departments of Financial Institutions", Title I "On Constitution", 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, establish:

"ARTICLE 15.- Institutions authorized to issue or administer credit, payment, or affinity cards, must sign written contracts with affiliated establishments, in which at least the following clauses shall be stipulated:

15.1 Obligation of the affiliated establishment to receive the card as a means of payment;

15.2 Obligation of the establishment to issue the charge slip and to verify that the signature and rubric signed by the cardholder is the same as that appearing on the back of the card and in the identification document, for which the establishment will require the presentation of the identification document and will note on the receipt the number of the citizenship ID, identity, or passport;"

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THAT the banking entity, based on what is established in the paragraphs transcribed above, is obligated to sign contracts with affiliated establishments, in which the obligation of the establishment to verify the identity of the credit card holder and request the presence of an identification document must be stated; and from the review and analysis carried out on the file of this case, it emerges that, with respect to the signature appearing on the voucher, the document that supports the transaction carried out at the establishment named 'POINT TECHNOLOGY', it was not verified, as it can be evidenced that there is a notable difference between the signature and rubric appearing on the voucher, compared to that registered in the bank and that appearing on the citizenship ID of Mrs. Sofía Daniela Sierra Peñaranda, holder of the VISA credit card No. 4454-4600-0020-3843; it was also not verified that the number on the charge slip does not match, nor does the correct name of the aforementioned cardholder;

THAT in virtue thereof, the affiliated establishment 'POINT TECHNOLOGY' failed to comply with what is established in paragraph 15.2 of Article 15 cited above, which in order establishes the obligation of the affiliated establishment to verify the identity of the cardholder, confronting the signature that appears there with the signature that was stamped on the charge slip (voucher) at the time of the transaction; and that the signature and rubric signed by the cardholder is the same as that appearing on the back of the card, in addition to requiring and reviewing that the identification document noted on the receipt is the number of the identity card or passport of the cardholder, since it is observed in the photocopy of the charge slip or voucher, the only document that supports the debt assumed with the financial institution issuing the credit card, the statement appears: 'THE ESTABLISHMENT CERTIFIES THAT THE CLIENT'S SIGNATURE IS AUTHENTIC';

THAT based on the obligation of banking entities or those authorized to sign affiliation contracts with establishments, it emerges that there is a clear contractual link between the bank and the establishment regarding the non-observance concerning the validation and verification of the cardholder's identity;

THAT paragraph 12.2 of Article 12, of Chapter V "Code of Rights of the User of the Financial System", Title XX "On 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, states that the user has the right to have entities of the financial system proceed to "Reject and not pay products that have not been expressly requested by the User of the Financial System (...)". A normative provision that Banco Pichincha CA failed to observe by accepting the voucher that was not processed observing the applicable regulations in a transaction;

THAT it is also important to indicate that Banco Pichincha C.A., within the framework of contractual and normative stipulations, has the obligation to offer an efficient service that guarantees cardholders a secure purchase through the correct use of their credit cards;

THAT the Superintendence of Banks and Insurance is 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 established in Article 213 of the Constitution of the Republic of Ecuador, therefore, it is appropriate that this control body observes the legal obligation of Banco Pichincha C.A. to provide its clients with all the security that the case merits, in order to protect the interests of the public according to the first paragraph of Article 1 of the General Law of Institutions of the Financial System;

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THAT Article 5, of Chapter IV "Procedure for the Attention of Complaints against Institutions of the Financial System", Title XX "On 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, empowers the control body to order the return of the values claimed by the controlled institutions, in the exercise of the functions and attributions that both constitutional and legal norms establish, since it disposes that:

“(...) 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, in the 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 period that may not exceed fifteen (15) days from the notification to send, under the legal warnings, the proof of compliance with the order issued.

For complaints of unauthorized withdrawals due to evidence of attempts or frauds produced in ATMs, 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 ATM due to whose defects or lack of security measures the fraud occurred.”;

THAT with regard to the protection of financial users and the pertinence of the Superintendence of Banks and Insurance in effectively safeguarding their rights, the General Law of Institutions of the Financial System in its Articles 1 and 142 states:

"ARTICLE 1.- This Law regulates the creation, organization, activities, functioning, and 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. (...)"

"Article 142.- When a financial system institution fails to comply with the resolutions of the Banking Board, the provisions of the Superintendence of Banks, and other applicable norms, particularly those referred to the required technical equity levels, the Superintendent will obligatorily demand and approve the regularization programs that are necessary and verify their compliance; will order all those preventive and corrective measures that are necessary and impose the pertinent sanctions, without prejudice to the civil and penal actions that may arise.”;

THAT according to the legal provisions cited, the Superintendence of Banks must ensure the protection of public interests, and it is also inferred that among the attributions and functions of the Superintendent of Banks is to monitor the correct functioning of financial system institutions, so that they comply with the norms governing their activity, according to international best practices, and that allow verifying the truthfulness of the information they generate, among others;

THAT for the reasons stated, it is evident that in the present case there was an incorrect procedure since the banking entity should have abstained from paying the value of the voucher, or in case of having made the payment, should have debited from future billing of the affiliated establishments the value of the consumptions made at 'POINT

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TECHNOLOGY', in addition it failed to comply with the provisions of the current regulations, to which it is subject as a provider of a service to its clients, for this reason it has not managed to disprove the foundations of the complaint presented by Mrs. Sofía Daniela Sierra Peñaranda, nor to disclaim its responsibility in the present case. Consequently, and in application of what is established in the transcribed Article 5 of the aforementioned norm, it corresponds for the control body to order the return of the claimed value;

THAT through communication of January 29, 2015, Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo and lawyer María José Araujo Álvarez, filed a request for reconsideration against the administrative act contained in Resolution No. JB-2014-3223 of January 14, 2015;

THAT the Banking Board, in the session held on April 1, 2015, in accordance with the second paragraph of Article 3, Chapter II, Title XVI, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, heard the appeal referred to in the preceding paragraph and determined that it does not comply with what is provided in the first paragraph thereof, that is, that there are no new elements of fact or law that motivate the elaboration of corresponding reports, therefore it decided to deny it outright; and,

IN exercise of its legal attributions,

RESOLVES:

SINGLE ARTICLE.- DENY the request for reconsideration filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., against the administrative act contained in Resolution No. JB-2015-3223 of January 14, 2015; and, consequently, CONFIRM said resolution.

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

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

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

Lic. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD