Banking Board of Ecuador

RESOLUTION No. JB-2015-3483

THE BANKING BOARD

CONSIDERING:

THAT, according to the last paragraph of the Second Transitional Provision of the Organic Code of Monetary and Financial Affairs, published in the Official Register Second Supplement No. 332 of September 12, 2014, the Banking Board will continue to act until it resolves all appeals it was hearing as of the date this Code entered into force, for a period of one hundred and eighty days;

THAT, through Resolution No. 054-2015-F of March 5, 2015, the Monetary and Financial Policy and Regulation Board extended by an additional 180 days the deadline for the Banking Board to continue acting and resolve all claims, appeals, and other administrative procedures within its competence;

THAT, the Superintendence of Banks and Insurance is competent to hear and rule on claims presented by users of the financial system, as prescribed in article 213 of the Constitution of the Republic, which defines the nature of the technical organism for surveillance, auditing, intervention, and control of economic activities and services provided by public and private entities, with the purpose that these activities and services comply with the legal framework and attend to the general interest;

THAT, the First Transitional Provision of the Organic Code of Monetary and Financial Affairs establishes that resolutions contained in the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, and norms issued by control organisms, will remain in force in all that does not oppose what is provided by said Code, until the Monetary and Financial Policy and Regulation Board resolves what corresponds, according to the case;

THAT, Mr. Francisco Xavier Gutiérrez Gutiérrez filed a claim against Banco Pichincha C.A., requesting that through the control organism, the Bank be asked for videos and/or recordings for the week between the 9th and 13th of September of the current year, since the withdrawals made on those dates were not performed by his person at the Atahualpa and Machachi bank branches of his savings account, and that the value of 2,350 US dollars be returned to him;

THAT, Banco del Pichincha C.A. through a letter received on February 13, 2014, argued that the withdrawals subject to the claim were carried out after fulfilling formal verifications on the respective slips; inclusive, the signature recorded in the system compared with the withdrawal slips shows no discrepancy. The bank detailed the withdrawals according to the following table:

DATE	BRANCH	AMOUNT
09/09/2013	Machachi	500
10/09/2013	Machachi	500
11/09/2013	Atahualpa Quito	500
12/09/2013	Machachi	500
13/09/2013	Atahualpa Quito	350

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Argued that to carry out this type of withdrawal, the presentation of the original ID card of the account holder is indispensable. It considers having taken all necessary precautions prior to the payment of the withdrawals subject to the client's claim. It cites the ruling by the Second Chamber of Civil and Commercial Matters of the Supreme Court of Justice, in a sentence published in the Official Register 8 of January 20, 2009, insofar as it is pertinent, it indicates: (...) "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 it must be determined if that signature is similar to the one recorded in the financial institution's register; because the cashier who pays has the obligation to verify that, 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 graphology expert." In the analysis performed on the signatures and rubrics stamped on the front and back of the images of the five withdrawal slips, and upon confronting them with the signature and rubric registered in the system, versus that of the ID card and the claim letter, no notable discrepancy is observed at first glance (sic) as demonstrated in the table indicated by the bank;

THAT, through letter No. DNAE-SAU-2014-01277 of February 27, 2014, the National Directorate of User Attention and Education, after analyzing the documentation in relation to the claim, among the arguments indicated that the amount of the transactions subject to review are the following:

DATE	BRANCH	AMOUNT
10/09/2013	Machachi	500
11/09/2013	Atahualpa Quito	500
12/09/2013	Machachi	500
13/09/2013	Atahualpa Quito	350

In the aforementioned resolution, the following was analyzed:

"(...) From the confrontation carried out between the signature recorded on the slip authorized for the withdrawal of funds from savings account No. 3128611200, with the signature registered in the bank's system and the claimant's ID card, it is noted that the signatures registered on the questioned withdrawal slips differ from those registered in the bank and with the ID card, considering that this discrepancy is reflected with the signatures registered on the withdrawal and payment slips made with dates prior to those claimed.

It should be noted that, regarding the matter subject of the claim, the intervention of the Superintendence of Banks and Insurance in claims presented by users of the financial system, within the scope of supervision and control, regarding the review of policies, processes, procedures, and internal controls that public and private system entities apply in the provision of financial services and products, because in the case we are dealing with, no special knowledge is even required, since from the simple comparison made with the signature registered on the deposit slips with the signature registered in the bank, differences are observed between them.

CONCLUSION

Based on the background exposed and in accordance with what is provided in letter b) and o) of the Organic Law of Institutions of the Financial System, in concordance with what

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is established in the second paragraph of article 5, chapter IV, title XX, book 1, title I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, the office in my charge orders Banco de Pichincha C.A. to proceed with the return of the savings totaling ONE THOUSAND EIGHT HUNDRED FIFTY US DOLLARS (USD 1,850.00), since there was an improper payment consisting of non-conforming signatures;"

THAT, Banco del Pichincha C.A., through a document presented on March 24, 2014, filed an appeal for reconsideration against the aforementioned resolution, which was denied through letter No. DNAE-SAU-2014-02074 of April 2, 2014, from the National Directorate of User Attention and Education, considering that the circumstances that motivated the issuance of the challenged administrative act have not changed, consequently ratifying its content;

THAT, through an appeal for review presented on April 16, 2014, Banco del Pichincha C.A. filed an appeal for review against the aforementioned administrative act;

THAT, through Resolution No. JB-2015-3239 of January 29, 2015, the Banking Board resolved to reject the claim contained in the appeal for review filed by Banco Pichincha C.A.; and, consequently, confirm the administrative act contained in letter No. DNAE-SAU-2014-02074 of April 2, 2014, with which the National Director of User Attention and Education denied the appeal for reconsideration and ratified the administrative act contained in letter No. DNAE-SAU-2014-01277 of February 27, 2014, which ordered Banco Pichincha C.A. to proceed with the return of the savings totaling USD $1,850, since the analysis determined that there were improper payments consisting of non-conforming signatures;

THAT, the main arguments of analysis of the aforementioned Banking Board resolution are:

"That the withdrawals subject to the claim were made from an electronic account, in which, the verification of the signature is carried out based on the withdrawal slips, in whose process the presentation of the original ID card of the account holder is necessary, in which, for the payment to proceed, the cashier must confront that the signature registered on the withdrawal slip does not show notable discrepancy with the one registered in the bank. Regarding this, the 'Withdrawal Instructions for Savings' with which Banco Pichincha C.A. has, number 4 regarding policies, establishes that prior to carrying out a withdrawal, the cashier must obligatorily perform the following verifications:

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 card 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, (...)

f) Presentation of the 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 signature registered in the Web Teller system; (...)

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

That from the transcription above, it is derived that funds deposited in the savings account can be withdrawn by their holder or by a third person, 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 withdrawal slips in certified copies attached by the controlled institution through letter No. BP-ACEC-2014-0030, of January 9, 2014, it is observed that the signature of Mr. Francisco Xavier Gutiérrez Gutiérrez is not similar to the signature recorded in the register sent by the banking entity, given that there are notable differences, for this reason, the claimed withdrawals should not have been carried out, as effectively required by the 'Withdrawal Instructions for Savings' managed by Banco Pichincha C.A.

That regarding the ruling issued by the Second Civil and Commercial Chamber, and in relation to the possibility this control organism has to consider whether or not the signature of Mr. Francisco Xavier Gutiérrez Gutiérrez is the one recorded on the withdrawal slips subject to the claim, it is important to clarify that the Superintendence of Banks, in fact, is not competent to establish the existence or non-existence of a forged signature, since within the competencies 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 after the preceding review and analysis, it is derived 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, in the claimed transactions, the 'Withdrawal Instructions for Savings' managed by the financial institution was not observed, which allowed withdrawals from savings account No. 31286611200, which Mr. Francisco Xavier Gutiérrez Gutiérrez maintains in the financial institution, causing economic harm to the claimant; for the aforementioned, the requirement established in Art. 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 after the analysis carried out on the withdrawal slips, it was determined that the signature recorded on the withdrawal slip of September 11, 2013, for the amount of USD $500, does not present noticeably different traits from the signature registered in the bank's system, for which reason, the value of the claimed harm is for the total amount of USD $1,850.00 and not for the amount indicated by Mr. Francisco Xavier Gutiérrez Gutiérrez, at the time of presenting the claim before this control organism;"

THAT, through a document dated March 17, 2015, presented on the 18th of the same month and year, Banco del Pichincha C.A. files an appeal for reconsideration against Resolution No. JB-

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2015-317 of February 4, 2015, indicated in the previous number, requesting the revocation of the administrative act contained in Resolution No. JB-2015-3239, based on the following arguments:

1. That the main issue of the case can be resolved in the confrontation of the signatures stamped on the slips of the controversial withdrawals and the signature of Mr. Francisco Gutiérrez registered in the Institution, for which they incorporate into the appeal the client's signature register. However, although the images of the five slips are in the claim file, they attach new color copies of the front and back of the same for a proper comparison. They attach images of two slips different from those that generated the claim to perform the comparison: register-controversial slips – indistinct slips. They affirm that from the evidence it is derived that the signatures contained in the five claimed slips and the signature recorded in the bank's register do not show notable discrepancy at first sight; as well as that the similarity is verified even, against slips that are not part of the claim.

The documentation attached for review must serve as a basis for the control organism to issue a reasoned resolution and in conformity with the precepts of the law. They consider that the Superintendence of Banks has the elements to perform the same examination that the cashiers who processed the withdrawals performed. They insist that there was no omission of internal procedures and that they acted in accordance with number 23.5 of article 23 of the Regulation to the Check Law which orders: "... that the signature of the drawer or drawers does not show notable discrepancy with the one registered in the Bank..." article which by analogy is applicable to withdrawals in savings accounts at the counter. They affirm that the cashiers processed the withdrawals because the slips met the respective requirements; as well as that the signatures stamped on the front and back do not show notable discrepancy at first sight, which evidences the will of the account holder to authorize the withdrawals; that the cashiers comply with procedural norms and legal precepts, according to their functions; in this case, to verify the similarity of signatures before paying the withdrawals.

2. They argue that in the resolution subject of the appeal, the pertinent fragment of the INSTRUCTIONS FOR WITHDRAWALS IN ELECTRONIC ACCOUNT, GANADOLAR, FUTURE SAVINGS, EUROS AND TRADITIONAL is transcribed, the same that was fulfilled by the cashiers who processed the claimed withdrawals. Consequently, the control entity does not support its resolution on the non-observance of at least one of the rules of the procedure for withdrawal of savings in electronic account.

3. In the challenged resolution, the Superintendence has determined that only one of the slips with which the withdrawals that motivated the client's claim were made, does not present noticeably different traits from the signature recorded in the bank's register; the appellant affirms that it is incomprehensible that the same analysis is not extended to all slips since there are no elements in the signature of the slip of September 11, 2013, that at first sight, differ from that slip from the remaining four. They insist that the bank has evidenced that there is no notable discrepancy at first sight, in any of the slips processed, which originated the claim of Mr. Gutiérrez. In concordance, the control entity has not incorporated factual or legal elements that could support its resolution. That the lack of contrary motivation contravenes what is established in number 23 of Art. 66 of the Constitution of the

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Republic, that is, the right to address petitions and receive attention or motivated responses, as well as entails its nullity as indicated in letter l) of number 7 of Art. 76 of the Constitution of the Republic.

4. That there is a lack of competence of the Superintendence of Banks to order the return of values, that among its attributes referred to in the Organic Financial and Monetary Code, none is listed that has reference to the power to order the restitution of values, as well as that that attribute for the resolution of disputes contained in number 16 of article 62 of the Organic Monetary Code cannot reach to have effects of monetary restitutions. Therefore, it concludes that the challenged resolution expressly violates the constitutional principle of legality, due to the lack of competence of the Superintendence of Banks, being consequently null the aforementioned administrative act;

THAT, regarding the first argument, in resolution DNAE-SAU-2014-01277 of February 27, 2014, from the National Directorate of User Attention and Education, which was ratified by resolution DNAE-SAU-2014-020704 of April 2 of the same year, the latter confirmed by the Banking Board resolution JB-2015-3239, it was analyzed that, from the confrontation carried out between the signature recorded on the slip authorized for the withdrawal of funds from savings account No. 3128611200, with the signature registered in the bank's system and the claimant's ID card, it is noted that the signatures registered on the questioned withdrawal slips differ from those registered in the bank and with the ID card, considering that this discrepancy is reflected with the signatures registered on the withdrawal and payment slips made with dates prior to those claimed; as well as that, from the simple comparison made with the signature registered on the deposit slips with the signature registered in the bank, differences are observed between them; for which it ordered the bank to proceed with the return of the savings totaling USD $1,850.00, since there was an improper payment consisting of non-conforming signatures. In resolving the appeal for reconsideration, the Subdirector of User Attention, through Resolution DNAE-SAU-2014-020704 of April 2, 2014, analyzed that banking entities have the legal responsibility to custody with zeal and extreme care the storage and protection of depositors' resources, even more so to extremize the review procedures of the document, since from the result of that observation will depend the degree of responsibility in the payment and considering that the comparison of signatures is fundamental to avoid improper payment of withdrawals, banking entities in guarantee of depositors, must have at least, that their personnel have experience and knowledge that allow them to distinguish, at first sight, signs of alteration or forgery. The Banking Board, in resolution JB-2015-3239, now challenged, analyzed the bank's argument that affirmed having demonstrated the real similarity existing between the signature registered in the bank's system and the one recorded on the withdrawal slips, even comparing it with the ID card and the client's letter; regarding this, it considered in the main:

"(...) However, despite this, from the analysis of the file and the review of the withdrawal slips in certified copies attached by the controlled institution through letter No. BP-ACEC-2014-0030, of January 9, 2014, it is observed that the signature of Francisco Xavier Gutiérrez Gutiérrez is not similar to the signature recorded in the register sent by the banking entity, given that there are notable differences, for this reason, the claimed withdrawals should not have been carried out, as effectively required by the 'Withdrawal Instructions for Savings' managed by Banco Pichincha C.A."

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THAT, from what is indicated, it is evident that the appellant's argument that the signatures contained in the claimed slips and the signature recorded in the bank's register do not show notable discrepancy at first sight, was already analyzed by the Banking Board in the challenged resolution, as well as by the Directorate of User Attention and Education in resolutions DNAE-SAU-2014-01277 of February 27, 2014 and DNAE-SAU-2014-0207 of April 2 of the same year, the latter which in turn was confirmed by this collegiate body, for which they do not constitute an element unknown before the Banking Board;

THAT, however, it is necessary to indicate that, in the user's claim for USD $2,350, presented before the Superintendence of Banks and recorded on page 057, it was indicated that the withdrawals made between September 9 and 13, 2013, were not performed by him; as well as that the bank informed that these withdrawals were the following:

DATE	BRANCH	AMOUNT
09/09/2013	Machachi	500
10/09/2013	Machachi	500
11/09/2013	Atahualpa Quito	500
12/09/2013	Machachi	500
13/09/2013	Atahualpa Quito	350

THAT, however, in Resolutions DNAE-SAU-2014-01277 of February 27, 2014 and DNAE-SAU-2014-0207 of April 2 of the same year, no analysis was made regarding the withdrawal of September 9, 2013 for USD $500, for which in the first of the aforementioned resolutions, it was ordered that the bank restitute only USD $1,850, of the USD $2,350 claimed, without considering the USD $500 of the withdrawal slip of September 9, 2013. Consequently, in the Banking Board Resolution JB-2015-3239, now challenged, no analysis was made regarding said withdrawal, and regarding which Banco del Pichincha C.A. attached through communication of April 17, 2015, received on the 20th of the same month and year, color copies of the withdrawal slip, among others;

THAT, the first paragraph of article 3 of Section I, of Chapter II, of Title XVI of Book I of the Codification of Resolutions of the Superintendence of Banks and the Banking Board, establishes that the appeal for reconsideration must be based only on the existence of elements of fact or law unknown to the Superintendence of Banks and Insurance or the Banking Board at the time of issuing the resolution, whose record, if it had existed, could have decisively influenced the sense of the resolution. In this case, the analysis of the signature recorded on the withdrawal slip of September 9, 2013, is a new element that was not considered by the Banking Board in the challenged resolution, for which its analysis is appropriate;

THAT, the verifications that should have been carried out regarding the signature