Banking Board of Ecuador

RESOLUTION No. JB-2015-3428

THE BANKING BOARD

CONSIDERING:

THAT on February 11, 2014, economist María Alejandra Rodríguez Arboleda filed a complaint against Banco de Guayaquil S.A., requesting that the debt arising from purchases made by third parties with her American Express credit card No. 376652151605007, from April 6 to 19, 2012, be eliminated; and that she be removed from the Credit Registry of the National Public Data Registry System;

THAT after notifying the claim to the Bank and requesting explanations and pertinent documentation, lawyer Teresa Roca, Regional Intendant of Portoviejo, through letter No. IRP-SAC-2014-265 of April 15, 2014, supported by Article 15 of Chapter IV, Title I, Book I of the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board; and Article 16 of Chapter III, Title XIV, Book I of the same Codification, ordered Banco de Guayaquil S.A. to annul the debt caused by the purchases of the month of April 2012, originated by persons who had taken possession of the American Express credit card No. 376652151605007 of Banco de Guayaquil S.A., belonging to the claimant. Additionally, it ordered "(...) to remove the information and negative qualifications generated based on the value that was reported to the National Public Data Registry System, (...) from April 2012 to the present date.";

THAT through communication received at the Regional Intendency of Portoviejo on May 2, 2014, the Executive Vice President-General Manager of Banco de Guayaquil S.A., filed an appeal for reconsideration against the administrative act contained in letter No. IRP-SAC-2014-265 of April 15, 2014, which was resolved by the Regional Intendant of Portoviejo with letter No. IRP-SAC-2014-440 of July 9, 2014, in the following terms:

"REJECT the claim contained in the appeal for reconsideration filed; and, consequently, CONFIRM the administrative act contained in letter IRP-SAC-2014-265 of April 15, 2014.";

THAT through communication received at the Regional Intendency of Portoviejo on July 23, 2014, Mr. Víctor Hugo Alcívar Álava, Executive Vice President-General Manager of Banco de Guayaquil S.A., filed before the Banking Board an appeal for review against the administrative act contained in letter No. IRP-SAC-2014-440 of July 9, 2014, arguing: That the report to the Bank of the loss of the credit card was made on April 20, 2012, that is, after the purchases were made; that if the report had been timely, the harm to the cardholder would not have occurred; that due to the lack of signature on the back of the credit card, the holder is responsible for the transactions carried out; that the challenged transactions were carried out with the physical presence of the card through the Datafast network, which receives the vouchers and not the Bank; and, that the Superintendency of Banks can only order the reimbursement of claimed values when the controlled institution has committed an incorrect procedure that causes harm to the claimant, which has not happened in the present case;

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THAT with letters Nos. JB-2014-3290 and JB-2014-3291, both dated December 15, 2014, the Secretary of the Banking Board communicated, in order, to the Executive Vice President-General Manager of Banco de Guayaquil S.A., that the appeal for review has been accepted for processing; and, sent a photocopy of the acceptance letter and the written appeal to economist María Alejandra Rodríguez Arboleda, with the indication to the recipients that they may present additional documentation within the period of fifteen days from being notified of that letter;

THAT through a written submission presented on January 15, 2015, Mrs. María Alejandra Rodríguez Arboleda states that she shares what was expressed in the appealed letter and attaches the free and unsworn version made before the Provincial Prosecutor's Office of Manabí by Mr. Jorge Eduardo Macías Yépez, Administrator of the UNISER Gas Station, where the fuel purchases were made with her stolen American Express credit card;

THAT this challenge is resolved in accordance with the First Transitional Provision of the Organic Monetary and Financial Code, published in the Second Supplement of the Official Registry No. 332 of September 12, 2014, whose text states that the resolutions contained in the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board, and the norms issued by the control bodies, will remain in force 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 claims, appeals, and other administrative procedures that it was hearing on 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 the second paragraph of Article 5, of Chapter IV "Procedure for the attention of claims against financial system institutions", of Title XX "Of the Superintendency of Banks and Insurance", of Book I "General norms for the application of the General Law of Financial System Institutions", of the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board, applicable to the case at hand, provides:

"ARTICLE 5.- (...)
If the situation that motivated the claim (...), originated in an incorrect procedure of the controlled institution, which had caused harm to the claimant, the Superintendency 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 Financial System Institutions, (...)." (emphasis added)

THAT Article 13, numeral 13.9 of Chapter V "Constitution, Functioning and Operations of Issuing or Administering Credit Card Companies

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and Credit Card Departments of Financial Institutions", of Title I "Of the Constitution", of Book I "General Norms for Institutions of the Financial System", of the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board, provides:

"ARTICLE 13.- The contract to be entered into between institutions authorized to issue or administer credit cards, payment cards, affinity cards, closed system affinity cards and closed system cards, and cardholders, shall be based on the contract model determined by the Superintendency of Banks and Insurance, which shall contain as a minimum the following:
(...)
13.9 Conditions related to the loss, theft, or deterioration of the card. If any of these cases occur, the cardholder, duly identified by full name, national identity card or citizenship number, and card number, must notify the issuer thereof, and the first shall not be responsible, from that moment on, for purchases made charged to the card reported as lost or stolen. The notification may be made in writing or by telephone, in which case the magnetic message shall constitute means of proof, according to what is provided in Article 121 of the Civil Procedure Code. The notification made by telephone must be ratified in writing within forty-eight (48) hours.
(...)";

THAT Article 15, numeral 15.2, of Chapter V, of Title I, of Book I, of the cited Codification, provides:

"ARTICLE 15.- Institutions authorized to issue or administer credit cards, payment cards, affinity cards, closed system affinity cards and closed system cards, must enter into written contracts with affiliated establishments, in which at least the following clauses shall be stipulated:
(...)
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 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 national identity card, identity card, or passport;
(...)";

THAT the pertinent parts of Clause Third of the Credit Card Issuance and Use Contract issued by Banco de Guayaquil S.A., stipulate:

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"THIRD: OBJECT AND NORMS
According to the conditions exposed in clause second, the Holder User submits to the norms and assumes the obligations detailed below:
(...)
e) Loss or Theft.- The Holder is responsible before the Issuer and before third parties, for the loss, theft, or any other type of fraudulent use of his Credit Card, consequently, he is responsible for the improper use thereof, until the moment of the telephone and written notification of such facts that the Holder must make to the Issuer, (...).
(...)
g) Account Statements.- (...). Every Account Statement and the operations recorded therein, shall be understood as accepted and confirmed, if fifteen (15) days have passed, and the Holder User does not challenge it, and it shall be understood that he is in total agreement with it.";

THAT Clause Eleventh "Verifications and Precautions" of the Establishment Affiliation Contract, insofar as pertinent, states:

"The following are the actions and verifications that THE ESTABLISHMENT obligates itself to carry out and the precautions it must take in each transaction with credit cards:
a) Require the national identity card and/or citizenship or other identification document, when the cardholder presents their card as a means of payment.
(...)
c) Verify that the signature panel on the card contains the signature and rubric of the cardholder and that this is the same as that on the identification document.
(...)
g) Instruct the employees of THE ESTABLISHMENT on the obligation they have to be present when the cardholder signs the charge slip (voucher), and to verify the truthfulness of their signature and rubric with the card and national identity card and/or citizenship or other valid identification document. (...)";

THAT the arguments of the appellant in the sense that the report to the Bank of the loss of the credit card was made on April 20, 2012, that is, after the purchases were made, and that if the report had been timely, the harm to the cardholder would not have occurred, are not warranted, since on the date indicated by the appellant, economist María Alejandra Rodríguez Arboleda was notified of the values she had to

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pay for purchases from April 6 to 19, 2012, without taking into account the notice of loss of the card that she made to the CALL CENTER in March 2012, which was cited in the complaint of March 19, 2012 that the claimant filed before the First National Police Commissioner of the canton of Portoviejo;

THAT it must be clarified that Banco de Guayaquil S.A. never sent to the Regional Intendency of Portoviejo the magnetic recording of the notification made by economist Rodríguez regarding the loss of her credit card; and, that on April 20, 2012, the claimant acted in the manner provided in letter g), of Clause Third of the Credit Card Issuance and Use Contract issued by Banco de Guayaquil S.A., that is, she challenged the values to be paid determined in the account statement corresponding to the credit card;

THAT regarding the argument that due to the lack of signature on the back of the credit card, the holder is responsible for the transactions carried out, it can be indicated that although there is an omission in this regard by the cardholder, it is the responsibility of the commercial establishment, at the time of the transaction, to verify that the signature on the back of the credit card matches the signature on the user's identification document; an obligation that evidently was not fulfilled, since, from the vouchers attached to the file, it is clear that the signatures on the charge slips are different from each other, and very different from the signature on the national identity card of the holder of the credit card. Therefore, the commercial establishment failed to comply with what is established in numeral 15.2 of Article 15 transcribed above, and with Clause Eleventh "Verifications and Precautions" of the Establishment Affiliation Contract, cited above;

THAT the argument that the challenged transactions were carried out with the physical presence of the card through the Datafast network, which receives the vouchers and not the Bank, does not absolve the financial institution of responsibility, since it never observed the omission in which the commercial establishment incurred by not verifying the cardholder's signature, more so when it is under the obligation to analyze that the charge slips meet the requirements contemplated in the norm and reject those that do not comply with it;

THAT it is the duty of the control body, as the Regional Intendency of Portoviejo has done, to verify, in the case at hand, that Banco de Guayaquil S.A., in the provision of the financial product being analyzed, has complied with what is established in the current regulations, based on the contractual link agreed upon with its cardholders, beyond the appellant's argument that the Datafast network is the one that receives the vouchers and not the Bank;

THAT the pending claim falls under the budget provided for in the second paragraph of Article 5 of Chapter IV, of Title XX, of Book I, of the Codification of Resolutions of the Superintendency of Banks and Insurance and the Banking Board, that is, that the control body can order the reimbursement of claimed values when the controlled institution has committed an incorrect procedure that causes harm to the claimant, which is what has happened in the

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present case. In virtue thereof, the appellant's argument regarding the inapplicability of the invoked article is not warranted;

THAT the National Legal Intendency, through memorandum INJ-DNJ-SAL-2015-0137 of February 6, 2015, recommended to the Banking Board to reject the claim contained in the appeal filed by the Executive Vice President and General Manager of Banco de Guayaquil S.A.; and,

IN exercise of its legal attributes,

RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the appeal for review filed by Mr. Víctor Hugo Alcívar Álava, Executive Vice President-General Manager of Banco de Guayaquil S.A.; and, consequently, CONFIRM the administrative act contained in letter No. IRP-SAC-2014-440 of July 9, 2014.

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

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

I CERTIFY.- Quito, Metropolitan District, on the twentieth of May of the two thousand fifteen.

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD