Banking Board of Ecuador

RESOLUTION No. JB-2015-3338

THE BANKING BOARD

CONSIDERING:

THAT by Resolution No. JB-2015-3228 of January 14, 2015, the Banking Board resolved: “REJECT the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A.; and, consequently, CONFIRM letter No. IRG-DAYEU-V-R-2014-286 of April 8, 2014, through which the replacement appeal contained in letter No. IRG-DAYEU-V-R-2013-639 of December 16, 2013, was rejected, by which lawyer Humberto Moya González, Regional Intendant of Guayaquil, accepted the complaint filed by Mrs. Jenny Patricia Falcón Vanegas and ordered Banco Pichincha C.A. to refund US$ 329.00 to savings account No. 6131056900 for the unauthorized transfer made by the user via the internet.”, fundamentally for the following considerations:

“(...)

THAT by written document received at the Regional Intendancy of Guayaquil on September 14, 2012, Mrs. Jenny Patricia Falcón Vanegas filed a complaint against Banco Pichincha C.A. regarding the transfer of US$ 329.00 made via the internet through savings account No. 6131056900, of which she is the holder;

THAT lawyer Humberto Moya González, Regional Intendant of Guayaquil, through letter No. IDG-DAYEU-ISFP-REQ-2012-0827 of September 19, 2012, admitted the complaint filed by Mrs. Jenny Patricia Falcón Vanegas for processing;

THAT through letter No. IDG-DAYEU-ISFP-REQ-2012-0827 of September 19, 2012, the aforementioned Regional Intendant of Guayaquil requested explanations from Banco Pichincha C.A. regarding the complaint filed by Mrs. Jenny Patricia Falcón Vanegas;

THAT through letter No. BP-ACEC-2012-1199 of December 27, 2012, Mr. José Andrade Merino, Regional Manager of Machala of Banco Pichincha C.A., in response to the request from the regulatory body, stated that internet transactions are carried out with the keys and coordinates of the “E – Key” card issued to the client; therefore, the transfer carried out through electronic means is the exclusive responsibility of Mrs. Jenny Patricia Falcón Vanegas and not the bank;

THAT through letter No. IRG-DAYEU-V-R-2013-639 of December 16, 2013, lawyer Humberto Moya González, Regional Intendant of Guayaquil, accepted the complaint filed by Mrs. Jenny Patricia Falcón Vanegas and ordered Banco Pichincha C.A. to refund US$ 329.00 to savings account No. 6131056900 for the unauthorized transfer made by the user via the internet;

THAT through communication entered at the Regional Intendancy of Guayaquil on December 27, 2013, Banco Pichincha C.A. filed a replacement appeal against the content of letter No. IRG-DAYEU-V-R-2013-639 of December 16, 2013, which was rejected through letter No. IRG-DAYEU-V-R-2014-286 of April 8, 2014, since the bank did not proceed to block the electronic channels despite the fact that access to Mrs. Jenny Patricia Falcón Vanegas’s account was made through an IP that was not registered for such purposes nor had it been used previously, as evidenced by the transaction history detail;

THAT on April 24, 2014, Mr. Antonio Acosta Espinosa, Deputy President of

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Banco Pichincha C.A., under the provisions of Article 137 of the General Law of Financial System Institutions and Article 6 of Chapter II “Norms for the application of replacement and review appeals in matters related to the financial system and the social security system; and of appeal in matters of private insurance, regarding administrative acts of the Superintendence of Banks and Insurance”, of Title XVI “On sanctions and appeals in the administrative sphere” of 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, filed a review appeal before the Banking Board against the content of letter No. IRG-DAYEU-V-R-2014-286 of April 8, 2014;

THAT through letter No. JB-2014-1024 of April 29, 2014, Licentiate Pablo Cobo Luna, Secretary of the Banking Board, accepted for processing the review appeal filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., against the content of letter No. IRG-DAYEU-V-R-2014-286 of April 8, 2014;

THAT Licentiate Pablo Cobo Luna, Secretary of the Banking Board, through letter No. JB-2014-1025 of April 29, 2014, informed Mrs. Jenny Patricia Falcón Vanegas of the review appeal filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., and extended the term to resolve the appeal by an additional sixty days;

THAT regarding the appellant's allegation that the appealed letter violates the principle of legal certainty provided for in the Constitution of the Republic of Ecuador, it should be indicated that letter No. IRG-DAYEU-V-R-2013-0369 of December 16, 2013, 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 legal norms, allows the principle of legal certainty to be 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, which states:

“Art. 76.- In any process in which rights and obligations of any order are determined, the right to due process shall be ensured, which will include the following basic guarantees:

(...)

7. The right of persons to defense will include the following guarantees:

(...)

l) The resolutions of public powers must be motivated. There will be no motivation if the resolution does not enumerate the legal norms or principles on which it is based and does not explain the pertinence of their application to the factual background. Administrative acts, resolutions, or rulings that are not duly motivated will be considered null. The responsible officials will be sanctioned.”;

THAT it is appropriate to point out that letter No. IRG-DAYEU-V-R-2014-286 of April 8, 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, the first paragraph of which is transcribed above, in addition, from the review of the file, it has been verified that Banco Pichincha C.A. presented, in response to the requirements of the

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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.- Persons are recognized and guaranteed:

(...)

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.

(...)”

In turn, letter b) of Article 180 of the General Law of Financial System Institutions provides as follows:

“Art. 180.- The Superintendent of Banks has the following functions and attributes:

(...)

b) To ensure the stability, solidity, and correct functioning of institutions subject to its control and, in general, that they comply with the norms governing their functioning, through permanent off-site supervision and on-site inspection visits, in accordance with international best practices, without any restriction and allowing determination of the economic and financial situation of the entity, the management of its business, evaluation of the quality and control of risk management, and verification of the truthfulness of the information it generates;

(...)”

THAT on the other hand, numerales 2 and 4 of Article 4 of the Organic Law for the Defense of the Consumer provide as follows:

“Art. 4.- Consumer Rights.- The fundamental rights of the consumer, in addition to those established in the Political Constitution of the Republic, international treaties or conventions, internal legislation, general principles of law, and commercial custom, are the following:

(...)

2. Right that public and private providers offer competitive goods and services of optimal quality, and to choose them freely; 3. Right to receive

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basic services of optimal quality;

4. Right to 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 of them, including the risks they might 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 Financial System Institutions”, of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, establishes as follows:

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

(...)

9.6 To receive clear, non-misleading advertising that does not induce error, which collects the necessary, complete, and adequate conditions of the advertised product or service. Advertising will have binding force when contracts or agreements are made based on the advertising offer; and.

(...)”

THAT from the constitutional, legal, and regulatory provisions transcribed above, it follows that since the Superintendence of Banks and Insurance is 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, which is transcribed below, it is appropriate that this regulatory body observes Banco Pichincha C.A. so that the services provided to the client are of optimal quality, which can also be chosen freely:

“Art. 213.- Superintendencies are technical bodies for surveillance, auditing, intervention, and control of economic, social, and environmental activities, and of the services provided by public and private entities, with the purpose that these activities and services are subject to the legal framework and attend to the general interest. Superintendencies will act ex officio or upon citizen request. The specific powers of the superintendencies and the areas requiring control, auditing, and surveillance of each of them will be determined according to the law.

(...)”

THAT what is stated above is corroborated by the fact that the public interest must be protected by the Superintendence of Banks and Insurance, according to the first paragraph of Article 1 of the General Law of Financial System Institutions, which textually provides as follows:

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“Art. 1.- This Law regulates the creation, organization, activities, functioning, and extinction of private financial system institutions, as well as the organization and functions of the Superintendence of Banks, entity in charge of the supervision and control of the financial system, in all of which the protection of public interests is taken into account.

(...)”

THAT the appellant's assertion that the transfer of US$ 329.00 was made on July 25, 2012, that is, within the term granted by Resolution No. JB-2012-2148, for controlled entities to execute projects and programs of security that avoid harm to clients through electronic channels, is not appropriate, since according to letter a) of Article 51 of the General Law of Financial System Institutions, which is transcribed below, Banco Pichincha C.A. is the depositary of its clients' money and is also responsible for the coverage services offered through electronic channels, whose operational risk cannot be transferred to the clients of banking entities in the country, since it is their obligation to demand that they have the appropriate securities:

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

a) Receive public resources 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 norms inherent to the presentation of complaints against controlled institutions, currently contained in 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 Financial System Institutions, granting the legal representative of the entity a term that may not exceed fifteen (15) days from notification to send, under the precautions of the Law, the proof of compliance with the order issued;”

THAT in the case under study, there is no evidence allowing to affirm that the holder of savings account No. 6131056900, Mrs. Jenny Patricia Falcón Vanegas, has failed her preventive obligations in the use of the keys and “E – Key” card, since upon learning of it, she informed Banco Pichincha C.A. of the questioned transfer; therefore, the appellant's assertion that the computer fraud that harmed Mrs. Jenny Patricia Falcón Vanegas occurred on July 25, 2012, that is, within the term granted through Resolution No. JB-2012-2148, for entities subject to the control of the Superintendence of Banks and Insurance

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to implement security systems that avoid harm to clients through computer channels, is not appropriate;

THAT according to the last paragraph of the Second Transitional Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332, of September 12, 2014, the Banking Board will continue to act until resolving all appeals that it was hearing on the date of entry into force of that Code, during a term of one hundred and eighty days;

THAT through communication of February 2, 2015, Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo and lawyer Andrea E. García D., filed a replacement appeal against the administrative act contained in Resolution No. JB-2015-3228 of January 14, 2015;

THAT the Banking Board, in the session held on April 1, 2015, as established in 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, so it decided to deny it outright; and,

IN exercise of its legal attributes,

RESOLVES:

SINGLE ARTICLE.- REJECT the replacement appeal filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A., against the administrative act contained in Resolution No. JB-2015-3228 of January 14, 2015; and, consequently, CONFIRM said resolution.

NOTIFY.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the first of April of two thousand fifteen.

Econ. Rodrigo Landeta Parra
GENERAL INTENDANT, S
PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the first of April of two thousand fifteen.

Lic. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD