Banking Board Resolution JB-2015-3453

Banking Board of Ecuador

RESOLUTION No. JB-2015-3453

THE BANKING BOARD

CONSIDERING:

THAT the second paragraph of the Third Transitional Provision of the Organic Code of Monetary and Financial Affairs determines 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 that Code, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT by means of a document received at the Superintendence of Banks and Insurance on February 11, 2014, Ms. Gloria Esperanza Valdiviezo Pinchao filed a complaint against the National Development Bank regarding unusual withdrawals from her savings account, made through automated teller machines (ATMs);

THAT the lawyer María Verónica Cevallos V., then Subdirector of User Attention, through Official Letter No. DNAE-SAU-2014-01572 of March 13, 2014, admitted the complaint filed by Ms. Gloria Esperanza Valdiviezo Pinchao for processing, and through Official Letter No. DNAE-SAU-2014-01573, of the same date, requested the respective explanations from the National Development Bank;

THAT through Official Letter No. 04244 of April 3, 2014, received at the Superintendence of Banks and Insurance on the 4th of the same month and year, Mr. Marco Ruales Valverde, Director of the Customer Attention Unit of the National Development Bank, in response to the request from the regulatory body, stated that the withdrawals made from Ms. Gloria Esperanza Valdiviezo Pinchao's account were carried out through card cloning and via ATMs of other financial institutions;

THAT through Official Letter No. DNAE-SAU-2014-02626 of April 28, 2014, Dr. Mirian Muñoz Solano, Acting Subdirector of User Attention and Education, accepted the complaint filed by Ms. Gloria Esperanza Valdiviezo Pinchao and ordered the National Development Bank to refund US$ 2,160.90 to savings account No. 4003258105 for the unauthorized withdrawals made through ATMs of the Network. Through communication entered at the Superintendence of Banks and Insurance on May 13, 2014, the National Development Bank filed an appeal for reconsideration, which was rejected through Official Letter No. DNAE-SAU-2014-04353 of July 15, 2014, since a detailed analysis of the technical arguments presented by the entity verified the exclusive responsibility of the financial entity in fulfilling them, as negligence, carelessness, or irresponsibility in the handling of the card and security key by Ms. Gloria Esperanza Valdiviezo Pinchao was not proven;

THAT on July 29, 2014, Mr. Freddy Alfonso Monge Muñoz, General Manager of the National Development Bank, with the professional sponsorship of the doctors: Fabián Zapata Ozano, Johana Herrera Zambrano, and Fabián Gómez Vizuete, filed an appeal for review before the Banking Board regarding the content of Official Letter No. DNAE-SAU-2014-04353 of July 15, 2014, which was admitted for processing through Official Letter No. JB-2014-2072 of August 4, 2014, and through Official

---

Banking Board of Ecuador Resolution No. JB-2015-3453 Page 2

No. JB-2014-2075, of the same date, informed Ms. Gloria Esperanza Valdiviezo Pinchao of the appeal for review filed, and extended the term to resolve the filed appeal by an additional sixty days;

THAT regarding the appellant's claim that the appealed letter violates the principle of legal certainty provided for in the Constitution of the Republic of Ecuador, it is indicated that Official Letter No. DNAE-SAU-2014-02626 of April 28, 2014, being motivated, that is, explaining in a reasoned and exhaustive manner the link between the decision adopted by the Regional Intendancy of Guayaquil, the factual background, and the norms of law, allows the principle of legal certainty to be made effective and ensures the right to defense, as provided for in numeral 7, letter l) of article 76 of the Constitution of the Republic of Ecuador;

THAT Official Letter No. DNAE-SAU-2014-04353 of July 15, 2014, contains all and each of the constitutional norms that guarantee due process provided for in article 76 of the Constitution of the Republic of Ecuador, in addition to, the review of the file has verified that the National Development Bank exposed, before the requests of the regulatory body, the defenses it considered pertinent before the Superintendence of Banks and Insurance, and exercised its right to defense;

THAT article 52 and numeral 25 of article 66 of the Constitution of the Republic of Ecuador provide as follows:

*"Art. 52.- Persons have the right to dispose of goods and services of optimal quality and to choose them freely, as well as to receive precise and non-misleading information about their content and characteristics.

The law will establish the mechanisms for quality control and the procedures for the defense of consumers; and the sanctions for violation of these rights, the repair and indemnification for deficiencies, damages, or poor quality of goods and services, and for the interruption of public services that were not caused by fortuitous event or force majeure."*

*"Art. 66.- It is recognized and guaranteed to persons:

(...)

25. The right to access public and private goods and services of quality, with efficiency, effectiveness, and good treatment, as well as to receive adequate and truthful information about their content and characteristics.

(...)"*;

THAT in turn, letter b) of article 180 of the General Law of Institutions of the Financial System, among the functions of the Superintendent of Banks, provides that it must ensure the stability, solidity, and correct functioning of institutions subject to its control;

---

Banking Board of Ecuador Resolution No. JB-2015-3453 Page 3

THAT numerales 2 and 4 of article 4 of the Organic Law for the Defense of the Consumer establish that fundamental rights of the consumer are that public and private providers offer competitive goods and services of optimal quality, and to choose them freely, and to receive adequate, truthful, clear, timely, and complete information about the goods and services offered in the market, as well as their prices, characteristics, quality, contracting conditions, and other relevant aspects thereof, including the risks they may present.

THAT numeral 9.6 of article 9 of paragraph II "Right to information on financial products and services", of chapter V "Code of user rights of the financial system", of title XIV "Code of Transparency and User Rights", of 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", establishes the following:

*"ARTICLE 9.- Access and receive directly clear, precise, timely, reasonable, adequate, validated, truthful, and complete information, related to the products and services offered by institutions of the financial system, especially in financial, legal, juridical, operational, fiscal, and commercial aspects, among others, including their associated risks:

(...)

9.6 Receive clear, non-misleading, and non-error-inducing advertising, which collects the necessary, complete, and adequate conditions of the advertised product or service. The advertising will have binding force when contracts or agreements are agreed upon based on the advertising offer; and,

(...)"*;

THAT the Superintendence of Banks and Insurance, 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 provided in article 213 of the Constitution of the Republic of Ecuador, it is appropriate that the regulatory body observes the National Development Bank so that the services provided to the client are of optimal quality, which can also be chosen freely; therefore, the provision of refunding values by the Superintendence of Banks is appropriate;

THAT what is stated above is corroborated by the fact that the interest of the public must be protected by the Superintendence of Banks and Insurance, according to the first paragraph of article 1 of the General Law of Institutions of the Financial System;

THAT the assertion of the appellant regarding the withdrawals made through the ATMs being carried out with the keys and with debit card No. 6031600086014881 being the exclusive responsibility of Ms. Gloria Esperanza Valdiviezo Pinchao, is not appropriate, since according to letter a) of article 51 of the General Law of Institutions of the Financial System, which is transcribed below,

---

Banking Board of Ecuador Resolution No. JB-2015-3453 Page 4

continuing, the National Development Bank is the depositary of its clients' money and is also responsible for the coverage services offered through the ATMs of the Network, whose operational risk cannot be transferred to the clients of the country's banking entities, since it is their obligation to demand that they have the necessary security measures:

*"Art. 51.- Banks may carry out the following operations in national or foreign currency, or in accounting units established in the Law:

a) Receive resources from the public in demand deposits. Demand deposits are banking obligations, comprising monetary deposits payable upon presentation of checks or other payment and registration mechanisms; savings deposits payable upon presentation of savings books or other payment and registration mechanisms; and, any other payable within a period of less than thirty days. They may be constituted under various modalities and mechanisms freely agreed upon between the depositor and the depositary;

(...)"*;

THAT the Banking Board issued the regulations inherent to the presentation of complaints against controlled institutions, currently contained in section I, chapter IV, title XX, book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, whose article 5 in its second paragraph establishes:

"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 complainant, 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 may not exceed fifteen (15) days from the notification to send, under the precautions of Law, the proof of compliance with the order issued.";

THAT there is no evidence to affirm that the holder of savings account No. 403258105, Ms. Gloria Esperanza Valdiviezo Pinchao, has failed to comply with her preventive obligations in the use of the keys and debit card No. 6031600086014881, since the National Development Bank itself stated that the withdrawals occurred with a cloned card;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAU-2015-0138 of February 9, 2015, recommended to the Banking Board to reject the claim contained in the appeal filed by the General Manager of the National Development Bank; and,

IN exercise of its legal attributes,

---

Banking Board of Ecuador Resolution No. JB-2015-3453 Page 5

RESOLVES:

ARTICLE ONE.- REJECT the claim contained in the appeal for review filed by economist Freddy Alfonso Monge Muñoz, General Manager of the National Development Bank; and, consequently, CONFIRM Official Letter No. DNAE-SAU-2014-04353 of July 15, 2014, through which Dr. Mirian Muñoz Solano, then Acting Subdirector of User Attention and Education, accepted the complaint filed by Ms. Gloria Esperanza Valdiviezo Pinchao and ordered the National Development Bank to refund US$ 2,160.90.

COMMUNICATE.- Given at the Superintendence of Banks and Insurance, in Quito, Metropolitan District, on the fourth day of June of the year 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 fourth day of June of the year two thousand fifteen.

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

---

Banking Board of Ecuador