Resolution No. JB-2015-3492 of the Banking Board of Ecuador

Banking Board of Ecuador

RESOLUTION No. JB-2015-3492

THE BANKING BOARD

CONSIDERING:

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 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 it was hearing as of 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. Said period has been extended by an additional one hundred and eighty days, through Resolution No. 054-2015-F of March 5, 2015, published in the Official Register No. 467 of March 27, 2015;

THAT from the aforementioned provisions, it is established that the Banking Board is competent to resolve the present review appeal;

THAT Mr. Cristóbal Colón García Espinoza, through communication received by the control body on March 13, 2014, filed a claim against Diners Club del Ecuador S.A., through which he mainly states:

"(...) on November 25, 2003 until December 6 of the same year, I made a trip along the Atlantic coast of the United States (...); I must state, Mr. Superintendent of Banks, that up to that moment, that is, August 2003, I maintained a balance with DINERS of $4,555.00, an amount I was forced to pay before undertaking the aforementioned trip, which I did immediately.

During the trip (...) operating ATMs and using the DINERS card, attempts were made to obtain money at different Banking Institutions (...), receiving a negative response from the aforementioned ATMs where no institution responded favorably, not obtaining money for the transactions made (...)

Upon my return to Ecuador, all these attempts [sic] to obtain money that yielded results were registered as debts on my credit card; I made a countless number (sic) of verbal complaints, and they went so far as to seize the balance I maintained in the account at Banco de Pichincha at that time.

On May 15, 2004, pressured by the circumstances of the moment and as I have never had problems with credits, (...) I was pressured by the aforementioned Credit Institution to sign a promissory note for $10,327.00, in favor of DINERS CLUB of Ecuador.

Since that date, and to honor the debt, I have been paying $1,500 annually, which means more than $15,000 that I have paid for an incomprehensible debt.

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What is more serious, Mr. Superintendent, is that I do not know why (sic) until this moment I appear with a debt of $15,000, when I had already paid off the aforementioned debt (...)"

THAT through Official Letter No. DNAE-SAU-2014-04134 of July 2, 2014, the full content of the claim filed against Diners Club del Ecuador was forwarded, granting it a term of 8 days to present the pertinent explanations and defenses; in response to said requirement, with Official Letter No. CS-G.C.C.-AR-403-2014, received by the control body on July 18, 2014, and Official Letter No. DC-AG-14-032 of the same date, the financial entity presented the explanations and defenses related to the claim presented by Mr. Cristóbal Colón García Espinoza, justifying its action, mainly, on the following: that the consumptions made by the former cardholder have been tacitly recognized, in that he did not formalize any claim regarding the charges on the credit card; and, by the fact that Mr. Cristóbal Colón García Espinoza, in a free and voluntary manner, having incurred in default, agreed to and signed a new promissory note due to the restructuring of the debt, which he held as of April 30, 2004;

THAT through Official Letter No. DNAE-SAU-2013-05205 of August 19, 2014, the administrative resolution regarding the claim presented by Mr. Cristóbal Colón García Espinoza was issued, where the National Directorate of User Attention and Education did not accept the claimant's petition, with which the same was declared concluded and its filing was ordered;

THAT through communication entered into the Superintendence of Banks on September 3, 2014, Mr. Cristóbal Colón García Espinoza, with the professional sponsorship of Dr. Rubén García Espinoza and lawyer Regis García Torres, filed a review appeal before the Banking Board against the administrative act contained in Official Letter No. DNAE-SAU-2013-05205 of August 19, 2014 [sic], arguing: that the withdrawals he made abroad were never cashed; that the claims he made to Diners Club del Ecuador were timely, limiting himself to stating that they would resolve his problem; that the promissory note referred to, he signed under pressure due to the circumstances of the moment, having never had problems with his credit, for the amount of $10,327.00 in favor of Diners Club of Ecuador; that it is out of context that the representatives of Diners Club del Ecuador have disappeared the information;

THAT through Official Letter No. JB-2014-2414 of September 9, 2014, the Secretary of the Banking Board, accepted the review appeal filed for processing; and, with Official Letter No. JB-2014-2415 of the same date, notified Diners Club del Ecuador S.A. Sociedad Financiera regarding the acceptance of said appeal;

THAT through Memorandum JB-2014-852 of October 2, 2014, the Secretary of the Banking Board, in extension of Memorandum JB-2014-780 of September 9, 2014, forwarded Official Letter No. CS-G-C-C.-AR-582-2014, received on October 1, 2014, signed by the Judicial Attorney of Diners Club del Ecuador S.A. Sociedad Financiera, regarding the review appeal filed by Mr. Cristóbal Colón García Espinoza, to Official Letter DNAE-SAU-2013-05205 [sic] of August 19, 2014, to which he attached information extracted from the website of the Judicial Function, regarding Case No. 09332-2014-63313 – (21/08/2014), which refers to the "money collection" action at the request of Diners Club del Ecuador S.A., Sociedad Financiera, against

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the defendants García Espinoza Cristóbal Colón, Valdez Peralta Paula, a process that the judge of the case has taken cognizance of and admitted to ordinary trial processing;

THAT through Memorandum No. SAL-2014-373 of November 17, 2014, as an extension of Memoranda Nos. SAL-2014-304, SAL-2014-315 of September 25 and October 8, 2014, respectively, the Subdirectorate of Legal Advice of the National Legal Directorate of this Intendancy, requested the technical criterion of the National Directorate of User Attention and Education, regarding the grounds of the review appeal filed against the administrative act contained in Official Letter No. DNAE-SAU-2013-05205 of August 19, 2014;

THAT, with Memorandum No. DNAE-SAU-2014-1273 of November 21, 2014, the National Directorate of User Attention and Education forwarded the required report, indicating mainly: that the claimant, by signing a payment agreement with the entity, recognized the previous debt, a situation that legally DINERS CLUB S.A. S.F. has sued in court in order to recover the unpaid values; that the promissory note signed by the claimant and his spouse on April 30, 2004, for the amount of USD$10,327.61, obliged him to pay irrevocably USD$573.76 on the 15th of each month starting from May 2004 until October 15, 2005; that the file contains the detail of the unpaid statements with default interest, in which it is evident that payments were not made on the stipulated dates; that there is no evidence of any claim to Diners Club S.A. related to the review of consumptions made previously to the signing of the promissory note;

THAT Article 1, in concordance with Article 180, letters b) and o) of the General Law of Institutions of the Financial System, assigns to the Superintendence of Banks and Insurance, within the scope of its competence, the supervision and control of the financial system, in all of which the protection of the public's interests is taken into account, as well as requiring that controlled institutions present and adopt the corresponding corrective measures;

THAT from the file containing the documents inherent to the claim and the defenses of Diners Club S.A. Sociedad Financiera, forwarded with Official Letters Nos. CS-G.C.C.-AR-403-2014 of July 18, 2014, and No. DC-AG-14-032 of the same date, it is appreciated that the controversy arising from the consumptions not accepted by the cardholder, as noted in his claim made on March 13, 2014, dates from November 25, 2003, to December 6 of the same year, without determining any amount, nor specifying the type of consumption; equally, there is no record of a formal claim made to the financial institution;

THAT the credit contract signed by Mr. Cristóbal Colón García Espinoza with Diners Club S.A. on April 15, 1991, stipulates: "7th. If the member does not claim his statement of account within the 10 days following the closing date, it is presumed that he received it and is satisfied with the balance. If the member does not receive his statement of account, he must consult his balance at the offices of Diners Club and under no circumstances may he invoke as a reason for default the failure to receive his statement of account";

THAT Article 1561 of the Civil Code determines that contracts are law for the parties. In this regard, it does not appear in the file that the cardholder filed any disagreement that he might have had at the time regarding said period; therefore, as Diners Club affirmed, the cardholder expressly recognized said consumptions and the debt incurred with the financial institution;

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THAT from the information forwarded by Diners Club S.A., it is observed that on April 30, 2004, Mr. Cristóbal Colón García Espinoza "proceeds to refinance his debt, as a result of this operation he signs a promissory note to order for the value of the debt he held on that date, which is US$10,327.61, a value he committed to cancel in full until October 15, 2005 through monthly installments of US$573.76 (...), an event that did not occur and his payments were totally irregular and at no time covered at least the established installment as can be appreciated from the record constant in the corresponding statements (...)";

THAT Article 1567 of the Civil Code states: "The debtor is in default: 1. When he has not fulfilled the obligation within the stipulated term, unless the law, in special cases, requires that the debtor be required to constitute him in default; (...)". (The underlined part does not correspond to the text);

THAT the appellant centered his argument on the insistence that the withdrawals made and which were the subject of the initial claim, did not belong to him; regarding this, from what is expressed in the preceding paragraphs, it is observed that this controversy was resolved between the parties, that is, Diners Club S.A. and Mr. Cristóbal Colón García Espinoza, with the restructuring of the credit pending payment on that date and accepted by the debtors with the signing of the promissory note to order for USD 10,327.00 of April 30, 2004, therefore, it becomes inadmissible;

THAT regarding the information alluded to by the appellant in the sense that Diners Club S.A. did not provide the "financial support documents" of the claimed transactions, in the defenses of the financial institution forwarded in Official Letter No. CS-G.C.C.-AR-403-2014 of July 18, 2014, it pointed out that since the consumptions were made more than 10 years ago, there were no accounting backups for these operations, based on what was established in the then General Law of Institutions of the Financial System; a response that is verified by Article 80 of the aforementioned law, which stated: "Financial institutions will maintain their accounting files, including the respective backups for a period of no less than six years counted from the date of closing of the fiscal year (...)"; consequently, for this reason, at the present date, such presentation is not enforceable; in any case, it is recorded in the file that Diners Club S.A. forwarded to the control body the respective information of the claim in which appear in one hundred and ninety-two useful pages of copies of the cardholder's statements from the year 2003 to June 2014;

THAT the Superintendence of Banks, in compliance with what is established in Article 76 of the Constitution of the Republic, in concordance with Chapter IV "Procedure for the Attention of Claims against Institutions of the Financial System", Title XX, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, attended and resolved the claim of Mr. Cristóbal Colón García Espinoza, presented on March 13, 2014, for transactions occurring between November 25, 2003, and December 6 of the same year, which included the transfer of the claim to the financial institution and the consequent request for information, that is, within the scope of its administrative orbit;

THAT Diners Club S.A., within the review appeal filed by Mr. Cristóbal Colón García Espinoza, forwarded to the control body information regarding Case No. 09332-2014-63313 – (21/08/2014), which for "money collection" has been filed against the claimant, invoking Articles 168 of the Constitution of the Republic and 8 of the Organic Code of the Judicial Function, a judicial action that does not affect the administrative processing of said appeal having been filed at the instance of the aforementioned financial society; in

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consequence, Article 6 of Chapter IV, Title XX, Book I, of the Codification of Resolutions of the Superintendence of Banks and the Banking Board is not applicable, which states: "If it is documentarily considered that the specific issue motivating the claim is subject to the knowledge and resolution of the ordinary justice at the instance of the claimant, user of the financial system, the Superintendence of Banks and Insurance will abstain from continuing its processing, in attention to the principle of independence of the Judicial Function" (The underlined part does not correspond to the text);

THAT for the aforementioned reasons, within the administrative scope corresponding to the control body to resolve, it is not observed that Diners Club S.A. regarding the disputed transactions, has incurred in incorrect procedure; and, therefore, the premise established in Article 5, Chapter IV, Title XX, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance is not met;

THAT the National Legal Intendancy, through Memorandum INJ-DNJ-SAL-2015-0345 of April 23, 2015, recommended to the Banking Board to reject the petition contained in the appeal filed by Mr. Cristóbal Colón García Espinoza; and,

IN exercise of its legal attributions,

RESOLVES:

SINGLE ARTICLE.- REJECT the petition contained in the review appeal filed by Mr. Cristóbal Colón García Espinoza; and, CONFIRM the administrative act contained in Official Letter No. DNAE-SAU-2013-05205 of August 19, 2014. [sic]

NOTIFY.- Given at the Superintendence of Banks and Insurance, in Quito, Metropolitan District, on the seventeenth of June of the two thousand fifteen.

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

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

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

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Banking Board of Ecuador