Resolution No. JB-2015-3501 of the Banking Board

Banking Board of Ecuador

RESOLUTION No. JB-2015-3501

THE BANKING BOARD

CONSIDERING:

THAT by Resolution No. JB-2015-3378 of April 22, 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-2014-917 of August 25, 2014, which ratified letter No. IRG-DAyEU-V-R-2013-740 of July 8, 2014, through which the Regional Intendancy of Guayaquil ordered BANCO PICHINCHA C.A. to proceed to reverse to Mr. Christian Antonio Blanco Salazar the sum of USD $971.71, improperly charged to the MASTERCARD - BANCO PICHINCHA credit card No. 5181140010571002, issued by Banco Pichincha C.A. in favor of the claimant, corresponding to the disputed transactions, carried out on April 18, 2014, at the establishments 'Comercial Zapatos E', 'Almacenes Dulce Hogar' and 'Almacén las Américas'", 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 resolutions contained 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 all 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 claims, appeals, and other administrative procedures that it was hearing as of the date of its entry into force, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT on April 22, 2014, Mr. Christian Antonio Blanco Salazar, presented a complaint before the control body against Banco Pichincha C.A., through which he requested that the referred banking institution be ordered to return US$ 971.71, corresponding to several purchases not made by the claimant, and charged to his credit card MASTERCARD No. 5181140010571002, basing his complaint on the fact that: a) on April 18, 2014, his MASTERCARD credit card was stolen, and on the same date several purchases were made at different establishments for the sum of US$ 971.71, which were not made by Mr. Christian Antonio Blanco Salazar; b) that he reported the loss of his credit card to the aforementioned financial entity; and, c) that the signature and rubric appearing on the charge slips for the purchases made do not correspond to the signature of the claimant;

THAT by letter No. DAYEU-ISFP-REQ-2014-800 of April 29, 2014, the Regional Intendancy of Guayaquil, accepted the complaint for processing and requested explanations and defenses from Banco Pichincha C.A. regarding the cited complaint;

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THAT through letter No. BP-ACEC-2014-0543 of June 6, 2014, received by the control body on the 10th of the same month and year, Banco Pichincha C.A. presented the explanations and defenses related to the complaint filed by Mr. Christian Antonio Blanco Salazar, basing its action, mainly, on the following:

"(...) The purchases subject of the complaint were made while the card was active and under the custody of the client.

It is the contractual responsibility of the client to keep custody of their credit card, according to the conditions of granting it, as stated in numeral 6 of the Contract for Issuance and Use of the Credit Card, which textually states:

(...)

In case of loss, theft, robbery, or deterioration of the card(s), Cardholder(s), duly identified by full names, national identity or citizenship number, and card number, they must notify the Bank immediately, in writing and/or by phone, and the Cardholders will not be responsible, from that moment on, for the purchases made charged to the card(s) reported as lost or stolen.

Regarding the documentation required in your Letter No. DAYEU-ISFP-REQ-2014-800, we indicate the following:

1. The facts and conclusions of the case are stated in the present Letter.
2. We attach copies of the vouchers corresponding to the following purchases made with credit card No. 5181140010571002:

DATE	VALUE	STORE NAME
2014/04/18	$ 146.88	COMERCIAL ZAPATOS E
2014/04/18	$ 334.80	COMERCIAL ZAPATOS E
2014/04/18	$ 70.00	ALMACENES DULCE HOGAR
2014/04/18	$ 120.99	ALMACEN LAS AMERICAS

With respect to the vouchers corresponding to the purchases made for the values of US$221.00 and USD$77.50 at the stores Mr. Shoes and Listo San Felipe, according to what is stipulated in the international franchise regulations for these cases, we have proceeded to request the billing backups from the respective establishment, it is important to mention that the response time for this type of requirement ranges between 30 and 45 days, as soon as we have the resolution we will notify you immediately.

3. We attach a record where it can be evidenced that there was physical presence of the credit card.
4. In authorization control carried out through the Authorizing Center it is random, it is important to indicate that the Bank authorized the transaction assuming that the person carrying out the transaction is the holder and custodian of the card, under no circumstances can we assume that it is a third party who is making the purchase, if the card is active (without any

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impediment due to loss or theft) and has available credit, the transaction must be authorized.

5. Mr. Blanco Salazar made only two deferred purchases with his credit card prior to the purchases subject of the complaint. (...)";

THAT by letter No. IRG-DAyEU-V-R-2014-740 of July 8, 2014, the Regional Intendancy of Guayaquil, accepted the claimant's request, and resolved to order Banco Pichincha C.A. to proceed to restore to Mr. Christian Antonio Salazar the sum of US$ 971.17, corresponding to the transaction disputed by the user, carried out on April 18, 2014;

THAT through communication received by the Regional Intendancy of Guayaquil, on July 21, 2014, the lawyer María Elena Franco San Lucas, Judicial Attorney of Banco Pichincha C.A., filed an appeal for reconsideration against the administrative act contained in letter No. IRG-DAyEU-V-R-2014-740 of July 8, 2014, which was rejected through letter No. IRG-DAyEU-V-R-2014-917 of August 25, 2014;

THAT through a document entered into the Superintendence of Banks and Insurance on September 5, 2014, Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo, and the 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-2014-917 of August 25, 2014, which was accepted for processing by Lic. Pablo Cobo Luna, Secretary of the Banking Board, through letter No. JB-2014-2421 of September 9, 2014;

THAT the appellant argues that the control body should take into account the fact that there is a process within the Judicial Function currently in force, in virtue of which, and since ordinary justice is hearing the present case, the Superintendence of Banks does not have jurisdiction to pronounce itself, for which he respectfully requests that it abstain from hearing the case; that permanent insecurity cannot constitute an argument for the consequences of acts committed by common crime to be attributed to the Bank, when it is the State that must guarantee human security, as provided in art. 393 of the Constitution of the Republic; so that under no point of view is the return of the values claimed by the financial entity appropriate; that with the aim of safeguarding the interests of financial users, Banco Pichincha C.A. has been constantly alerting and through various means its clients about the risks of current crime and the permanent care that clients must have with their personal and transactional documents; that the applicable regulation for the case absolves Banco Pichincha C.A. of all responsibility, more so when the entity has not acted negligently in making the payment corresponding to the purchase made;

THAT the Superintendence of Banks is competent to hear and resolve the complaint filed by Mr. Christian Antonio Blanco Salazar, against Banco Pichincha C.A., under the provisions of article 213 of the Constitution of the Republic;

THAT article 76 of the Law of the Contentious-Administrative Jurisdiction establishes that "(...) in no case is the execution of the administrative act suspended";

THAT numerals 15.1 and 15.2 of article 15, of Chapter V "Constitution, Functioning and Operations of Credit Card Issuing or Administrating Companies and Credit Card Departments of Financial Institutions", Title I "Of the Constitution", Book I "General Norms for the

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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 enter into written contracts with affiliated establishments, in which the following clauses shall be stipulated at least:

15.1 Obligation on the part 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 the number of the citizenship, identity, or passport card on the receipt;";

THAT the banking entity, based on what is established in the transcribed provisions, the entity must have subscribed contracts with the affiliated establishments, in which the obligation of the establishment to verify the identity of the cardholder and the request that they present an identification document must be stated;

THAT the signatures appearing on the vouchers, documents supporting the transactions carried out at the establishments "Comercial Zapatos E", "Almacenes Dulce Hogar", "Almacén las Américas", reflect notable differences between the signatures and rubrics appearing on the vouchers and that appearing on the citizenship ID of Mr. Christian Antonio Blanco Salazar, holder of the MASTERCARD - BANCO PICHINCHA credit card;

THAT the above reflects that the affiliated establishments "Comercial Zapatos E", "Almacenes Dulce Hogar", "Almacén las Américas", failed to comply with the obligation to verify the identity of the cardholder, for which reason, the controlled entity must enforce the user's rights as well as oblige the aforementioned establishments to respect the regulations and consequently not validate the payment;

THAT the second paragraph of article 5, of chapter IV, title XX, book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, provides:

Article 5.- (...)

"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 exercise of the functions and attributes 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 cannot exceed fifteen (15) days from the notification to send, under the legal warnings, the proof of compliance with the order issued.";

THAT in the present case there was an incorrect procedure since the banking entity should have abstained from paying the value of the vouchers, of the purchases made at "Comercial Zapatos E", "Almacenes Dulce Hogar", "Almacén las

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Américas", due to notable disagreement in the signatures stamped on the vouchers with that appearing in the identity document;"

THAT through communication received by the Superintendence of Banks on May 28, 2015, Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo and lawyer Andrea E. García D., filed an appeal for reconsideration against the administrative act contained in resolution No. JB-2015-3378 of April 22, 2015;

THAT the Banking Board, in a session held on June 24, 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 preparation of corresponding reports, for which it decided to deny it outright; and,

IN exercise of its legal powers,

RESOLVES:

SINGLE ARTICLE.- DENY the appeal for reconsideration filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A. against the administrative act contained in resolution No. JB-2015-3378 of April 22, 2015; and, consequently, CONFIRM said resolution.

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

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

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

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