Banking Board of Ecuador

RESOLUTION No. JB-2015-3432

THE BANKING BOARD

CONSIDERING:

THAT through Resolution No. JB-2015-3298 of March 12, 2015, the Banking Board resolved: (...) "REJECT the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, in his capacity as Deputy President of Banco Pichincha C.A.; and, consequently, CONFIRM the administrative act contained in letter No. IRG-DAYEU-V-R-2014-889, of August 14, 2014, by which the Regional Intendancy of Guayaquil rejected the motion for reconsideration and ratified the administrative act contained in letter No. DAYEU-V-R-2014-753, of July 9, 2014, which ordered Banco Pichincha C.A. to proceed with the return of savings totaling USD 2,932.00 in favor of Mrs. Priscila Jazmín Cajas Freire, since the analysis determined that there were improper payments consisting of non-conforming signatures. (...)", for the following considerations:

(...)

"THAT the second paragraph of the Third Transitional Provision of the Organic Monetary and Financial Code determines that the Banking Board will continue to act until it resolves all claims, appeals, and other administrative procedures it was handling as of the date of entry into force of the aforementioned Code, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board, which determines that the control body is competent to hear and resolve the present review appeal;

THAT through communication received by the control body on April 11, 2014, Mrs. Priscila Jazmín Cajas Freire, with the professional sponsorship of lawyer Galo Almeida Tapia, filed a formal complaint against Banco Pichincha C.A., stating that: "(...), I was able to observe via the Internet on February 10, 2014, that on days 05, 06, and 07 of February 2014, from my savings account No. 2201025047, at Banco del Pichincha S.A., (sic) they proceeded to withdraw amounts ranging from $980; $972, and $980, which total $2,932.00, in the cities of Quinsaloma and Quevedo, respectively, without me having made said withdrawals nor even authorizing a third party, therefore having been harmed by the entity through its employees, I proceeded to file the respective complaint on February 13, 2014, which was assigned No. 2461483 and informed me that it would be resolved by March 10, 2014, but through Letter BP-RRCI-2014-0066, sent by Gina Moncayo Pino, Business Manager of the Centro Agency of Banco de Pichincha C.A. (sic) Guayaquil, in which, attempting to evade and disclaim its responsibility, the banking entity and to protect the co-authors and instigators of the harm (...).";

THAT it should be mentioned that, in parallel, Mrs. Priscila Jazmín Cajas Freire filed a complaint with the Attorney General's Office, in which she indicated that unknown third parties made money withdrawals from the account she holds at Banco Pichincha C.A., which caused her economic harm;

THAT through letter No. DAYEU-ISFP-REQ-2014-757, of April 21, 2014, the User Attention and Education Directorate of the Regional Intendancy of Guayaquil, accepted the complaint filed by Mrs. Priscila Jazmín Cajas Freire for processing and requested explanations and defenses from Banco Pichincha C.A. regarding the case. With letter No. BP-ACEC-2014-0464, of May 16, 2014, received by the control body on the 20th of the same month and year, Mrs. Glenda Icaza Aguirre, authorized signatory of the financial institution, informed:

(...)

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The withdrawals subject of the complaint, made in savings account No. 2201025047 according to the detail below, were carried out after formal verifications were completed on the respective slips; inclusive, the signature recorded in the system, compared with the signatures on the withdrawal slips, shows no discrepancy.

DATE	OFFICE	AMOUNT
05-02-2014	QUINSALOMA	980,00
06-02-2014	QUEVEDO SUR	972,00
07-02-2014	QUEVEDO	980,00

To carry out this type of withdrawal, it is essential to present the original ID card of the account holder and the ID card of the person authorized for the withdrawal.

Banco Pichincha C.A. considers that it has taken all necessary precautions prior to the payment of the withdrawals subject to the customer's complaint.

For this complaint, it is necessary to cite what was resolved by the Second Chamber of Civil and Commercial Matters of the Supreme Court of Justice, in its cassation sentence issued on September 3, 2007, at 10:40 a.m. and published in the Official Register No. 8 of January 20, 2009, within case 405-2007, which states textually, in its pertinence:

"However, the Chamber makes it evident that in the case under study, the matter is not resolved by determining with experts if the signature placed on the slip authorizing the withdrawal of funds is handwritten by the account holder, but rather what must be determined is if that signature is similar to the one recorded in the financial institution's registry; because the cashier who pays has the obligation to verify that, and not the obligation to determine if the signature on the slip is handwritten by the account holder, because if so, to make each payment, they would have to be with a handwriting expert.

(...). (sic);

THAT through letter No. DAYEU-ISFP-REQ-2014-1031, of June 6, 2014, the control body requested Banco Pichincha C.A. to send the videos and images containing the transactions subject of the complaint. With letter No. BP-ACEC-2014-0569, of May 13 (sic) 2014, Mrs. Glenda Icaza Aguirre, authorized signatory of the financial institution, stated: "(...) that regarding the videos and according to Resolution of the Superintendence of Banks and Insurance number 306 (sic) and considering Art. 37, numeral 37.3 which states that recording and image storage systems must guarantee the archive of at least three (3) months of recording, through tapes, digital video discs (DVD) or any other system, we do not have the videos requested in your letter";

THAT through letter No. DAYEU-V-R-2014-753, of July 9, 2014, the Regional Intendancy of Guayaquil, after analyzing the documentation regarding the complaint, concluded the following:

"(...)

From the simple comparison of the signatures recorded on the front of this savings withdrawal slip and the signature recorded in the registry of the controlled financial institution, it is determined that there is a notable discrepancy in the signature, it being necessary to mention that the signature recorded on said (sic) slip, the surname "Caja" is observed, which is different from the surname "Cajas" recorded in the aforementioned registry.

In merit of the above and in exercise of the powers delegated by the Superintendent of Banks and Insurance (...), this Office resolves:

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ACCEPT the complaint filed by Mrs. PRISCILA JAZMÍN CAJAS FREIRE, with citizenship ID No. 091523475-1, against BANCO PICHINCHA C.A., for the reasons stated (...).
ORDER the controlled financial institution BANCO PICHINCHA C.A. to proceed to restore to Mrs. PRISCILA JAZMÍN CAJAS FREIRE the sum of US$ 2,932.00 (TWO THOUSAND NINE HUNDRED THIRTY-TWO 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), into the savings account No. 2201025047 of the complainant, and send this Office, within a term of eight days, counted from the receipt of this letter, the documentation that accredits the compliance with this resolution.
NOTIFY Mrs. PRISCILA JAZMÍN CAJAS FREIRE and the controlled financial institution BANCO PICHINCHA C.A., with the full content of this letter, so that they may exercise the administrative appeals established in the current legal framework.

(...);

THAT through writing received by the control body on July 21, 2014, lawyer María Elena Franco San Lucas, in her capacity as Judicial Attorney of Banco Pichincha C.A., filed a motion for reconsideration against the administrative act contained in letter No. DAYEU-V-R-2014-753, of July 9, 2014;

THAT through letter No. IRG-DAYEU-V-R-2014-889, of August 14, 2014, the Regional Intendancy of Guayaquil rejected the motion for reconsideration filed, considering that the arguments exposed by the appellant do not change the circumstances that motivated the issuance of the challenged administrative act, consequently, it ratified the total and full content of the administrative act contained in letter No. DAYEU-V-R-2014-753, of July 9, 2014;

THAT through writing received by the Superintendence on August 27, 2014, Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo, filed a review appeal against the administrative act contained in letter No. IRG-DAYEU-V-R-2014-889, of August 14, 2014;

THAT the appellant bases the appeal filed on the following arguments:

That prior to any analysis on the grounds of the present challenge, it is necessary to highlight the fact that there is an ongoing judicial process, which is even referred to by Mrs. Cajas in her communication addressed to the Superintendent of Banks; in such virtue, and being in the knowledge of the ordinary justice, the Superintendence of Banks and Insurance does not have competence to pronounce itself, therefore, in application of the principle of independence with which the Judicial Function has, the control body is not competent to hear the present appeal, therefore it must abstain from resolving it;
That Banco Pichincha C.A., in the motion for reconsideration filed, has demonstrated the real similarity existing between the signature registered in the Bank's system and the one recorded on the withdrawal slips, even comparing the signature recorded on the citizenship ID and the client's letter, so it is inappropriate to insist on the return of the values claimed by Mrs. Priscila Jazmín Cajas Freire;
That Banco Pichincha C.A. considers it opportune the criterion contained in the ruling issued by the Second Chamber of Civil and Commercial Matters that has annulled a sentence, declaring a lawsuit without merit, as it has considered that the cashier has the

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obligation to verify if the signature is "similar" to the one recorded in the financial institution's registry and not to determine if the signature on the slip is handwritten by the account holder, because if so, to make each payment, they would have to be with a handwriting expert;

That the withdrawals subject of the present challenge were carried out after fulfilling substantive and formal verifications, which evidences that there were no incorrect procedures by Banco Pichincha C.A. that would have caused economic harm to the complainant;

THAT through letter No. JB-2014-2341, of September 1, 2014, Lic. Pablo Coba Luna, Secretary of the Banking Board, accepted the review appeal filed by the financial institution for processing;

THAT Article 213 of the Constitution of the Republic and Articles 1 and 180, letters b) and o), of the General Law of Financial System Institutions establish that both the savings account holder and the financial institutions have rights and obligations to fulfill based on a contract; in the first case, to maintain proper custody of the documents delivered by the client; in the second, to comply with orders regarding the funds entrusted to them, in harmony with the pertinent legal and regulatory norms and adequate internal controls that allow safeguarding the interests of their clients;

THAT letter a), of Article 51 of the General Law of Financial System Institutions establishes as an authorized operation of banks, to capture public resources in demand deposits, which are payable through a savings book or mechanisms previously agreed upon by the parties. In this sense, in the present case, savings account No. 2201025047, was opened on October 3, 2013, at the Centro Guayaquil Agency, of Banco Pichincha C.A., in the city of Guayaquil, whose holder is Mrs. Priscila Jazmín Cajas Freire, under the status of independent signature;

THAT regarding the competence of the control body concerning judicial processes, alleged by the appellant, it is important to point out that numeral 1 of Article 168 of the Constitution of the Republic in concordance with Article 8 of the Organic Code of the Judicial Function, determine the principle of independence with which the Judicial Function has, establishing that no other function, body, or authority of the State may interfere in the exercise of the duties and powers of the Judicial Function;

THAT the second paragraph of Article 6, of Chapter IV "Procedures for the attention of complaints against financial system institutions"; Title XX "Of the Superintendence of Banks and Insurance", Book I "General Norms for the application of the General Law of Financial System Institutions" of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, states:

"ARTICLE 6.- If it is documented that the specific matter motivating the complaint is under the knowledge and resolution of the ordinary justice at the instance of the complainant, 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, enshrined in numeral 1 of Article 168 of the Constitution of the Republic, which agrees with Article 8 of the Organic Code of the Judicial Function, a fact that will be communicated to the parties, informing them that, for this reason, the suspension or filing of the process has been ordered, as appropriate.

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The complaints referred to in the previous paragraph are excepted from the provision above regarding cases that, in parallel, are under the knowledge of the ordinary justice in criminal matters, in which case the Superintendence of Banks and Insurance will hear and resolve them, within the scope of its competence.";

THAT the cited articles establish the constitutional and legal obligation that the Superintendence of Banks has, regarding complaints and appeals presented in the administrative sphere by financial institutions as well as by their users, even when the case is simultaneously under the knowledge of the ordinary justice, exclusively in criminal matters. From the above, the control body has competence to hear, process, and resolve the complaint filed by Mrs. Priscila Jazmín Cajas Freire against Banco Pichincha C.A., which under no legal criterion constitutes a violation of the Principle of Independence with which the Judicial Function has, as erroneously argued by the financial institution;

THAT regarding the similarity of the signatures recorded on the withdrawal slips, with the signatures registered in the bank's system, it must be mentioned that numeral 4 of the "Withdrawal Instructions for Savings" with which Banco Pichincha C.A. itself has, establishes the verifications that cashiers must obligatorily carry out prior to making savings withdrawals;

"(...)

a) Presentation of the original identification document of the account holder(s), according to the signature condition (...), which cannot be expired, the expiration of the ID cannot be until the death of the holder, perforated or altered. (...).

b) If a third party makes the withdrawal request, they must present their original identification document, (...).

c) Signatures and signature conditions in the debit account.

d) Available funds.

e) Validation of fingerprint of the account holder(s) for withdrawals when the amount is greater than 500.00 US dollars.

f) 1) Presentation of the original identification document of the account holder(s), according to the signature condition (...), when it is an authorized withdrawal to third parties.

g) Validate that the signature on the identification document is found on the back of the withdrawal slip and compare it with the one registered in the Web Teller system.

h) If the withdrawal is authorized, the cashier must validate that the slip contains the seal and rubric of the Operational Supervisor from 10,000.00 US dollars onwards for withdrawals by account holders.

i) If the withdrawal slip is already previously signed by the client, the cashier must request the holder or third party (...) to sign again on the reverse of the slip in their presence.

(...);"

THAT from the preceding transcription, it is clear that the funds deposited in the savings account can be withdrawn by their holder or by a third party

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provided that contractual requirements are met and prior to the fulfillment of verification processes, which are of mandatory application by financial institutions for the delivery of money, being the bank cashier who is responsible for carrying out the corresponding validations prior to the delivery of money, that is, in compliance with what is established in their own internal instructions. However, despite this, from the analysis of the file and the review of the documentation attached by the financial institution through letter No. BP-ACEC-2014-0464, of May 16, 2014, it is observed that the signature of Mrs. Priscila Jazmín Cajas Freire is not equal to the signature in the registry, given that there are notable differences, in which it is easily observed that on the reverse of the slips dated February 5, 6, and 7, 2014, the surname recorded in the signature is "Caja", which differs from the one existing in the signature registry presented by the financial entity, in which the surname "Cajas" is appreciated. The existence of an erasure/amendment on the withdrawal slip dated February 6, 2014, in the name recorded in the signature "Priscila" is also evidenced;

THAT the aforementioned instruction establishes that it corresponds to the bank cashier to verify that there are no erasures/amendments on the slips, which demonstrates that the financial institution did not carry out the verifications to which it was obligated: Therefore, Banco Pichincha C.A. failed to comply with the policies and procedures on savings withdrawals by users;

THAT regarding the ruling issued by the Second Chamber of Civil and Commercial Matters, and in relation to the possibility that the control body has to consider whether or not the signature of Mr. Francisco Xavier Gutiérrez Gutiérrez is the one recorded on the withdrawal slips subject of the complaint, it is important to clarify that the Superintendence, in effect, is not competent to establish the existence or non-existence of a forged signature, however, within the powers granted to it by law, it corresponds to control that financial entities comply with the legal and regulatory provisions that govern them within the administrative scope;

THAT Article 5, of Chapter IV "Procedure for the attention of complaints against financial system institutions; Title XX "Of the Superintendence of Banks and Insurance; Book I "General Norms for the application of the General Law of Financial System Institutions", states:

"ARTICLE 5.- If the result of the analysis carried out by the Superintendence determines the need for the controlled institution to introduce corrective measures to regularize the situation that motivated the complaint, the Superintendent of Banks and Insurance or the official who has the delegation of said authority, will issue the corresponding order.

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 powers contemplated in letters b) and o) of Article 180 of the General Law of Financial System Institutions, granting the legal representative of the entity a term that cannot exceed fifteen (15) days from the notification to send, under the warnings of Law, the proof of compliance with the order issued";

THAT based on what was manifested and after the review and analysis preceding, it is clear that Banco Pichincha C.A. incurred in an incorrect procedure, generated by the lack of timely security measures regarding withdrawals in savings accounts, that is, that in the claimed transactions, the "Withdrawal Instructions for Savings" managed by the financial institution was not observed, which allowed withdrawals from savings account No. 2201025047, which Mrs. Priscila Jazmín Cajas Freire holds at the financial institution, causing economic harm to the complainant; for the stated reason, the

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requirement established in Article 5, of Chapter IV, Title XX, Book I of the Codification of Resolutions of the Superintendence of Banks and the Banking Board was fulfilled;

(...)

THAT through communication of April 10, 2015, Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., filed a motion for reconsideration against the administrative act contained in Resolution No. JB-2015-3298 of March 12, 2015;

THAT the Banking Board, in the session held on May 20, 2015, as established by 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 ibidem, 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 powers,

RESOLVES:

SINGLE ARTICLE.- REJECT the motion for reconsideration filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., against the administrative act contained in Resolution No. JB-2015-3298 of March 12, 2015; and, consequently, CONFIRM said resolution.

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

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 Coba Luna
SECRETARY OF THE BANKING BOARD