appendices 5 national report: spain - european...

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Study on the implementation of Recommendation 97/489/ECconcerning transactions carried out by electronic payment

instruments and in particular the relationship between holderand issuer

Call for Tender XV/99/01/C

Appendices 5

National Report: SPAIN

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Spain

Apol·lònia MARTÍNEZ NADAL (co-ordinator)Professor of Commercial Law

José Luis MATEO HERNÁNDEZAssistant Professor of Commercial Law

Silvia FELIU ALVAREZ DE SOTOMAYORAssistant Professor of International Private Law

University of the Balearic Islands

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Structure of the report

Work Package 1 ...................................................................................4

Work Package 2 .................................................................................69

Work Package 3 .................................................................................84

Work Package 4 .................................................................................98

Work Package 5 ...............................................................................141

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Work Package 1

Steps taken by the Member States to implement theRecommendation

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Analysis of existing legislation and draft legislation

1.1 Existing legislation

1.1.1. Overview of the existing legislation

In these pages we will try to show and analyse the measures taken in Spain from the

legal point of view to incorporate the principles included in the Recommendation

97/489/EC. Nevertheless it is previously necessary to state that, in our Law, we do not

find any specific legislation on fund transactions and payments carried out by electronic

payment instruments, and that there only exist punctual allusions that respond to a

partial legal reality. As we shall see through the analysis carried on, we have articles

dispersed among different laws and regulations that in an indirect way introduce the

main communitary protective measures in our legal system, though not in an even way

and certainly not in a reassuring one.

On this basis, and before carrying on the concrete analysis of the existing fragmented

regulation, we may conclude that the hints referring to the electronic payment

instruments are to be found in the following legal texts:

(a) On one hand, we can mention those texts in which a specific mention is made of the

electronic payment instruments or where directly implementable regulations can be

found. In this sense such laws as the following have to be taken into account: Law 7/95,

of 23 March, de Crédito al Consumo (Credit to Consumption); Law 7/96 of 15

January, del Comercio Minorista (Retail Commerce); Law 26/84, of 19 July,

General para la Defensa de Consumidores y Usuarios (General for the Defence of

consumers and users); Law 7/98, of 13 April de condiciones generales de la

contratación (general conditions of contract); the Circular del Banco de España

13/1993, of 21 December, to credit entities, on change of Circular 8/1990, on

operation transparency and protection to customers 1; and the Circular CECA

1The Order of 12 December 1989 on rates of interest and commission, rules of conduct,

information to customers and publicity from credit Entities (from now on, the Order), accordingto the provisions of article 48.2 of Law 26/1988, of 29 July on discipline and intervention ofCredit Entities, extends to the whole of these Entities the regulations that the Order of 3 March1987 had established for the Credit Entities, while it introduces some changes in the regulation

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579/1989, which transcribes Order of 12 December 1989, on types of interest and

commissions, norms of acting, information to the Circular del Banco de España

13/1993, of 21 December, to Credit Entities, on change in Circular 8/1990, on

transparency of operations and protection of customers; and the CECA Circular

579/1989, which transcribes Order of 12 December 1989, on interest rates and

comissions, rules of conduct, information to customers and publicity from Credit

Entitiesb.

(b) On the other hand, those texts which refer merely incidentally to means and

instruments of payment. And here we must include the Ley Orgánica 10/95, of 23

November, del Código Penal (Penal Code), the Real Decreto 1369/87, of 18

September, by which is created the Electronic Compensation System; the Real

Decreto 692/96, of 26 April; Law 19/93, of 28 December on certain measures of

prevention of money laundering; the Ministerial Order of 15 October 1992, which

dictates rules of conduct of the Deposit Entities that renders Bank services in the

Delegations and Administrations of the Tributary Administration State Agency,

modified by Order of 25 April 1997; The Circular del Banco de España 5/90, of 28

March, regulator of the Money Market Telephonic Service.

applicable to the matter, and liberalises the main part of the publicity that the Credit Entitiescarry out. In the same way it extends the area of responsability of the Claim Service of the Bankof Spain to those that the customers of all the Credit Entities might put forward on the conductof these entities that might break the mentioned rules of discipline or the good practice andbanking uses. Therefore, it becomes necessary to modify the Circulars 15/1988, of 5 Decemberand 24/1987,of 21 of, that regulated the matters quoted in the former paragraph related to theDeposit Entities, extending its application to all Credit Entities, and introducing the changes andprecisions advised by the acquired experience and by the necessary progression in theprotection of the interest of users of banking services. The community of objectives of bothCiculares suggests bringing them together in a unique text. Particularly, according to theprovisions of the order, in this Circular is introduced, as the main novelty of the procedure ofprocessing claims, their previous formulation before the customer's defender, or equivalentorgan of the Credit entity, of which the general implantation is considered, of great interest.

2 This group of regulations shows the heterogeneousity and the lack of harmonisationthat Spanish Law gives to the treatment of electronic means of payment, and it includes genericconsumer protecting rules or contract regulating rules as well as sectorial banking regulationsthat pretend to establish an adequate legal frame for the correct development and exercise of thefunctions in this area of activity.

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1.1.2. Content.

To carry on, and without detriment to a further development in the pages that will

follow, (under the point dedicated to the specific implement of the Recommendation

object of study), we will proceed to describe, in a very brief way, the contents and

purpose of the different legal texts that refer in a more concrete manner to the electronic

instruments of payment.

1) The Law 7/95, of 23 March, de Crédito al Consumo, has for its main object the

incorporation to the Spanish Law of the European Council Directive 87/102/CEE, of

22 December 1986, concerning the approach of the legal dispositions, regulation

and administrative rules of the Member States in matters of Credit to

Consumption, and its subsequent modification by the Directive 90/88/CEE, of 22

February 1990, and is implemented according to its article 1, ? to the contracts in

which a physical o legal person in the course of his duties, profession or trade, from

now on businessman, grants or commits himself to grant a consumer a credit in the form

of a delayed payment, lawn, opening of credit, or whatever equivalent means of

financiation, to satisfy private necessities out of his business or professional activity".

To enhance that protection to consumers consists first of all in publicity, in informing

them, in the content, the form and the assumptions of nullity of the contracts and in the

determination of concepts, as the total cost of credit, and the annual equivalent rate, that

have the purpose, not only to inform consumers better, but also to give more

transparency to the cost of credits and permit to contrast different offers.

2) The Law 7/96, of 15 January, del Comercio Minorista, for its part, and according

to its Exposition of purposes, not only pretends to establish some rules into the

distribution sector and regulate new contractual formulas, but also wants to become the

basis for the modernisation of the Spanish trading structures, contributing to correct the

lacks of balance between the big and the small commercial companies and above all to

the maintenance of free and loyal competence. It is not necessary to insist on the fact

that the most immediate and tangible effects of a situation of free and loyal competence

give rise to a continuous improvement of prices and quality and other conditions of the

offer and service to the public, in other words it means the most efficient conduct for the

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costumers´profit. Its particular importance lies in the fact that in its Second Chapter,

regulating remote sales, specifically regulates the payment by credit card.

3) The Law 26/84, of 19 July, General for the Defence of Consumers and users

pretends to give consumers and users a legal protection and defence instrument , that

doesn't exclude or replace other acts and legal developments derived from close or

connected competence fields, such as Commercial Law, Penal Law or the regulations on

industrial security, hygiene and public health, regulation of production and domestic

commerce. And its objectives, exposed in its Statement of grounds, are nothing but: 1.

To establish, upon steady and firm basis, the efficient proceedings for the defence of

consumers and users. 2. To dispose of the adequate legal frames to favourish an

optimum development of the associative movement in this field. 3. To declare the

principles, criteria, obligations and rights that form the defence of consumers and users,

and that, in the field of its competence, they will have to be taken into account by the

authorities in their future acts and law developments in the frame of the principles laid

down by the Constitutional Tribunal.

4) The Law 7/98, of 13 April, on general conditions of contract, has for its object the

transposition of the Directive 93/13/CEE of 5 April 1993 on abusive clauses in

contracts celebrated with consumers, and also the regulation of general conditions of

contracting., and is dictated in virtue of the competition titles that the Spanish

Constitution attributes exclusively to the State in the article 149 paragraph 1, rules 6

and 8, because they affect the commercial and civil law. Its importance lies in the fact

that, as shown in its Statement of grounds, it has been decided to carry on the

incorporation of the said Guideline through a Contracting General Conditions Law that,

at the same time, through its additional regulation (the first one), modifies the previous

legal frame of protection to the consumer, constituted through Law 26/1984, of 19 July,

General for the Defence of Consumers and Users . In terms of contents, it is

determined that the general conditions are required to be part of the contract, to be

known or , in certain cases of non-written contracting- there should exist the real

possibility of being known, and of being written in a transparent way, clearly, accurately

and simply. But they are also required, when contracting with a consumer, not to be

unfair.

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5) The Circular del Banco de España 8/1990, of 7 September, to Credit Entities, on

transaction transparency and protection to customers (and the Spanish Bank

Circular 13/1993, of 21 December, to credit entities, on modification of Circular

8/1990, on transaction transparency and protection to customers . In this Circular

an important novelty is introduced, referring to the proceedings of processing of the

claims to the Spanish Bank Claim Service. This new regulation makes it necessary of its

previous statement before the Client Defender or equivalent organ of the Credit Entity,

which seems very important to introduce. The introduction of this new procedure

appears justified on one hand in the own experience of the Claim Service, which has

highlighted a high number of resolutions on behalf of the Entities before the claims of

the demanders, and on the other, in the considerable proportion of claims solved in

favour of clients, by the defenders of the customer that are already operating in a

number of Entities. All in all, what is pretended with this is to speed up the solution of

numerous claims that will very likely be seen to without requiring a later and more

complex administrative action, which in any case would turn out to benefit from this

previous procedure, by receiving a more documented claim.

1.1.3. Compliance with the recommendation.

1.1.3.1.Transparency of conditions for transactions (articles 3 and 4 of the

Recommendation)

What kind of information is provided to the holder before the contract is

concluded?

As we have already quoted, there isn't any specific Spanish regulation of the electronic

means of payment and therefore we do not find an even solution to all the questions

that, for what interests us, refer to the information that the holders of an electronic

instrument of payment have to receive since the precise moment in which the contract is

concluded, before the contract and finally after each transaction has been carried out.

Nevertheless we do find generic mentions that try to gather the general protection which

should be given to every consumer in the whole range of procedures leading to the

completion of his contracts, and the fundamental principle of transparency that must

inspire the acts that the entities issuing electronic instruments of payment carry out.

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Things being so, we must mention first the Law 7/95, of 23 March, Credit to

Consumption that, in its article 16, states "the businessman who offers a consumer a

credit will have the obligation to give him before the celebration of the contract, if the

consumer so requests, a document stating all the credit conditions, as a binding offer,

that he will have to maintain during a minimum ten- day working period from its

handing over, unless there should be extraordinary circumstances or for reasons

beyond his control"

For its part, article 13 of the Law 26/84, of 19 July, General for the Defence of

Consumers And Users, sets the general right for information that consumers have

stating that " the goods, products and in its case, services put at the consumers and

users disposal will have to include, carry with them or permit in a real and objective

way a true, efficient and sufficient information on their essential characteristics…"

In a similar way, and in what refers to the concrete communication of the contracting

conditions, that will have to be implemented to those introduced in the massive

contracts which regulate the contract of an electronic instrument of payment, article 5.2

of the Law 7/98, of 13 April, on General Conditions of Contracting, warns that "It

wont be understood that there has been acceptance of the incorporation of the general

conditions to the contract when the issuer hasn't duly informed the holder of their

existence and hasn't handed him out a copy of them"

What kind of information is provided to the holder upon signature of the contract?

What is said in the last paragraph is logically applicable at the very moment of the

celebration of the contract, implying, the necessity that the holder of the instrument of

payment be well informed on all and each one of the included clauses, and of the full

meaning of them all, since, if it shouldn't be so, article 7 states that ?"the following

general conditions wont be duly incorporated to the contract: a) Those which the holder

shouldn't have had a real opportunity of knowing in a complete way at the time the

contract was celebrated, or when they shouldn't have been signed, when it would be

found necessary, in the terms established by article 5".

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On the other hand, and entering the concrete regulation of the banking sector, the

Circular 8/1990, of 7 September, del Banco de España to Credit Entities, on

transparency in transactions and protection of customers, states in its sixth

regulation, related to the handing over of contractual documents, commission fees and

valuation rules, various obligations. In the first place it quotes in its section 1 that "the

handing over of the contractual document, related to the operation carried out, to which

number 7 of the Order refers, will be compulsory for the Entities in the following cases:

a) In the opening of current sight accounts or saving accounts. The corresponding

contractual document will also have to be handed out in the issuing, and when the

conditions of issue should change, in the renewal of electronic means of payment linked

to the above mentioned accounts, such as debit cards or others" . Furthermore, it adds

that the handing over of the contractual document will also be compulsory for the

Entities "b) In the following operations: when their amount should be inferior to

60.000 Euro: leasing or credit operations, including the ones instrumented through

credit cardsd. Next, it states that, the same way will have to be carried out the handing

over of the contractual document in which it be accorded with the client the possibility

for him to accede to telephonic or electronic systems which permit him to contract or to

use the services served by the entity" e, to, next, in its section 5, conclude that "in the

cases foreseen in former section 1, a copy of the fees of comissions and expenses will be

handed over, also including regulations on dates of valuation that should refer to the

arranged transaction. For this it will be enough to hand out the sheet or sheets of the

leaflet in which are quoted all the concepts of application for this transaction, or the

partial leaflets mentioned in section 5 of rule 3, when they should exist".

The same Circular, a clue in the development and establishment of a transparent

banking system, adapted to the European regulation, also states, in the already

mentioned sixth rule, section 2, that "the Entity will retain and keep a copy signed by

the client of the contractual document; exception is made of instrumented deposits in

passbooks when these should be the contractual document. It will also keep the

customer's receipt to the copy of the document that has been given to him". And to

conclude, and within the extremes that must necessarily be included in the contracts

4 Modified by Circular 13/1993.

5 Added by Circular 4/1998.

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related to active or passive transactions in which time should intervenef, the payment

instruments are specifically mentioned by stating that, in section 6, "particularly the

contracts linked to the issue of credit cards, or of other electronic means of payment

(debit cards, purse, etc.), or in the contracts on use of telephonic or electronic systems

of access to the banking services to which the second paragraph of section one refers,

they will reflect the commissions which derive from their issue or settlement, the

comissions linked to their renewal, recharge or maintenance and all those connected to

the electronic means, whatever it is"..

6 The quotations that have to be stated with a general character in these contracts are: a)

the rate of nominal interest that will be used in the final payment of some interests or, in thecase of discount operations, the effective initial and final prices of the transaction. In the sameway the surcharges for applicable delay will be stated. (modified by Circular 4/1998). When therate of interest should be unsteady, it will have to be specified in a precise, unmistakable way,the form in which it will be determined at each moment ( added by Circular 5/1994) b) thefrequency of the accrued interest, the dates of the accrued interest and their liquidation, or thecase being, of the effective prices and surcharges quoted in the former lines, the formula andmethods used to obtain, from the nominal rate of interest, the absolute sum of the accruedinterests, and generally speaking any other detail needed for the calculation of the mentionedsums. ( modified by Circular 4/1998) c) The applicable comissions, with concrete indication oftheir concept, amount, dates of accrue and liquidation, as well as, in general, any other dataneeded for the calculation of the absolute amount of such concepts. The generic references tothe fees won't be admitted. In particular the contracts associated to the issue of credit cards, orother electronic means of payment ( debit cards, purse, etc.), or in the contracts on use oftelephonic or electronic systems of access to banking services quoted by the second paragraphof section one of this regulation, will reflect the comissions that will derive from their issue orestablishment, the ones linked to its renovation, recharge and maintenance, and all those linkedto the use, whatever it should be, of the electronic means. ( modified by Circular 4/1998/ d) Therights that correspond contractually to the parties, in what refers to the modification of theagreed interest, or to the commission or the applicable repercuting expenses; the procedure towhich such modifications should adjust themselves, and that in any case will have to becommunicated to the customers with time enough before their application; and the rights thatthe customer has when the modification takes place. In the contracts of credit to consumers andin those of financiation of movable items on instalments under the Law 50/1965, ruled byArticle 8 of Law 7/1995, the differential will be applied, in this case, to the reference index usedto fix the new cost, and the identification of the index used, or, if it were not available, a cleardefinition of it, and of the process to follow to calculate it. The data used as a basis for the indexwill have to be added according to an objective procedure. ( modified by Circular 3/1996) e) therights of the customer regarding the possibility of advanced refund of the transaction. f) theothers that must be included according to the specific regulation of each Credit entity. g) As forthe expenses that affect, when their amount cannot be determined at the time of the signature ofthe contract, at least, their concept will have to stand. When expenses globally satisfied by theentity should affect, and their individualisation is impossible, the fee leaflets will have to quotethe affecting amounts. In the case of saving accounts, or fixed term deposits instrumented inpassbooks, the points stated in the former writing will be incorporated to the proper passbook orto a different contractual document

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In the same way, the Circular CECA 579/1989, that transcribes Order of 12

December 1989, on rates of interest and commission, rules of conduct, information

to customers and publicity from Credit Entities, in its seventh rule its expresses

itself in similar terms.

Is the information provided in easily understandable words and in readily

comprehensive form?

On this matter, the Law 26/84, of 19 July, General for the Defence of consumers and

users , states in a general manner in its article 2.1.d., and as a basic right of any

consumer and user, that of receiving a correct information on the different products and

services and education and spreading to enhance the knowledge on its adequate use or

enjoyment. But the above mentioned law is even more concrete and accurate in its

article 10 which introduces clearly that:?"1. The clauses, conditions or stipulations that

applies to the offer or promotion of products or services, including those provided by

public administrations and their associated entities and companies, will have to comply

with the following requirements:

a) Precision, clarity and simplicity in the writing, with possibility of readily

comprehension, without quotations of texts or documents not handed over previously or

simultaneously to the conclusion of the contract, and to those which, in any case, an

intentional reference should be made in the contractual document(...)

2. In case of doubt on the meaning of a clause, the most favourable interpretation for

the consumer will prevail".

On its part, article 5.4 of the Law 7/98, of 13 April, on general conditions of

contract, states that "the drafting of general clauses will have to comply with the

criteria of transparency, clarity, precision and simplicity". And furthermore,

posteriorly, in its article 7.b), it states the legal consequences of the failure to comply

with this requirement of incorporating the general conditions of contracting when it

quotes that they won't be incorporated to the contract the following general conditions:

b) those which are illegible, ambiguous, obscure and incomprehensible, unless, as for

the last ones, they would have been duly accepted in writing by the holder and they

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would comply with the specific regulation that disciplines in its area the necessary

transparency of the clauses contained in the contract.

What kind of information is provided to the holder after each transaction?

In a very general manner, the Law 26/84, of 19 July, General for the Defence of

consumers or users , when it refers to the conditions applicable to the offer of products

and services, quotes in its article 10.1.b) that in every transaction should be carried out

the "b) handing over, unless the holder should intentionally renounce, of a justifying

receipt, a copy or a supporting document of the transaction, or in its case, of a duly

explained budget".

For its part, and within the banking sectorial legislation, we have already mentioned the

Circular of the Bank of Spain 8/1990, of 7 September, to Credit Entities, on

transparency of transactions and protection to customers and users, which states

this general duty of communicating transactions including those that have been carried

out through credit cards.

What kind of optional information is provided to the holder in the contractual

conditions? Is this information provided gratuitously?

In the Spanish legal code, there is no general or sectorial regulation that gathers such

circumstance, which in any case will be subject to the good banking practice.

What kind of optional information is provided to the holder after each

transaction? Is this information provided gratuitously?

In the Spanish legal code, there is no general or sectorial regulation that gathers such

circumstance, which in any case will remain subject to the good banking practice.

LEVEL OF COMPLIANCE WITH THE RECOMMENDATION: 4

1.1.3.2. Obligations and liabilities of the parties to a contract

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What are the obligations and liabilities of both parties if EPI is lost or stolen?

The Spanish legal code doesn't have any general or sectorial specific regulation, which

deal with the obligations and liabilities if an electronic instrument of payment is stolen

or lost. In these cases, when solving the controversies arisen, allusions are made to the

good conduct code of the European banking sector, relating to the systems of payment

through cards, of 14 November 1990, which is the answer of the European associations

of the credit sector (AESC) to the Recommendation 88/90/CEE, of 17 November, and of

course, to the Recommendation 97/489/CEE, object of study in this Project.

Do issuers comply with the obligation to provide information on the reciprocal

obligations and liabilities before the contract is concluded? ( or well before the

issue of the EPI)

It has already been quoted that in any case the obligation of handing over the celebrated

contract exists, where the clauses regulating the legal relation existing between issuing

entity and client will be stated.

What precautions do holders take ( or are supposed to take) to keep their EPI

safe?

In the Spanish legal code, there is no general or sectorial specific regulation that deals

with this matter. In these cases, when solving the controversies that can arise, allusion is

made by the legal organs and by the settled matter for the solution of quarries (Claim

Service of the Bank of Spain),to the good conduct code of the European banking sector,

related to the payment systems through cards, of 14 November 1990, which is the

response of the European associations of the Credit Sector (AESC) to the

Recommendation 88/90/CEE, of 17 November and, of course, to the Recommendation

97/489/CE object of study in this Project.

What is the amount of the holder's liability before notification?



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made by the legal organs and by the settled matter for the solution of quarries (Claim

Service of the Bank of Spain), to the Code of Conduct of the European banking sector,





Is the principle of exempting a holder from liability (article 6.3) where the EPI is

used without physical presentation or electronic identification applied in practice?

This principle has been intentionally gathered in the Spanish Law, Law 7/96, of 15

January, of Retail Commerce, of which article 46, relating to payment through credit

card determines that "when the amount of a purchase should have been charged using

the number of a credit card, without the card being presented directly, or electronically

identified, its holder will be able to demand the immediate nullity of the charge. In such

a case, the corresponding notes of debt and re-payment in the accounts of the supplier

and the holder will be carried out as quickly as possible. Nevertheless, if the purchase

had actually been carried out by the holder of the card and, therefore, this one were

demanding injustifiedly the nullity of the corresponding charge, he would have to

respond before the seller and refund the quantities owed as damages produced as a

consequence of the nullity".

Is the holder provided with a right to countermand an order?


with this matter. In these cases, when solving the controversies that can arouse, allusion

is made by the legal organs and by the settled matter for the solution of quarries (Claim






What happen when the issuer alters the terms of the contract?

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In this sense, Circular of the Bank of Spain 8/1990, of 7 September, to Credit

entities, on transparency of transactions and protection to customers, specifies in

the 4th paragraph of the seventh rule, that "in the contracts of undefined duration, the

communication of the changes in the rates of interest, commissions or repercuting

expenses, will also be possible by publishing the new conditions, in the form established

by the fifth regulation during the two month subsequent to the mentioned modification,

not being possible to implement it before this period. The fees published will be,

nevertheless, of immediate application in the operations derived from precise and

individualised petitions from the customers. In any case, the changes in rates of interest,

commissions or associated expenses applicable to the contracts of issue of credit cards,

or of electronic means of payment, or in the contracts on use of telephonic or electronic

systems of access to banking services referred to in the second paragraph of part one of

this regulation, will have to be communicated previously and individually to the clients

in good time. The minimum period in which this previous communication must be made

will be quoted in the fee leaflets referred to by the third regulation of this Circular".

Does the issuer comply with the obligation not to dispatch an unsolicited EPI?


with this matter. In these cases, when solving the controversies that can arouse, allusion

is made by the legal organs and by the settled matter for the solution of quarries (Claim







1.1.3.3. Notification procedure and liability of the issuer after notification.



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made by the legal organs and by the settled matter for the settlement of disputes (Claim







1.1.3.4. Burden of proof.



made by the legal organs and by the settled matter for the settlement of disputes (Claim

Service of the Bank of Spain), to the applicable current Spanish legal regulations,

contained in the Civil rights law and to the Code of Conduct of the European banking

sector, related to the payment systems through cards, of 14 November 1990, which is

the response of the European associations of the Credit Sector (AESC) to the




1.1.3.5. Settlement of disputes.

Are adequate and effective means for the settlement of disputes between a holder

and an issuer available? ( both judicial and non judicial redress procedures)

a) From the legal point of view: in the first place, and first of all, the article 24.1 of the

Constitución Española establishes in a specific way that "every person has a right to

receive the effective protection of the judges courts in order to exercise their rights

and legitimate interests, and should not, in any case, remain undefended".

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Taking as a fundamental and immutable basis the fundamental constitutional right,

which we have just mentioned, we can find several legal texts that bring into evidence

such an idea one way or the other. This way we can quote the Law 26/84, of 19 July,

General for the Defence of consumers and users, which, in its article 2.1, states that

"There are basic rights of consumers and users: (...) b) Protection of their legitimate

economic and social interests; particularly before the inclusion of unfair clauses in the

contracts. c) Redress or reparation for the harm done (...) f) Legal protection,

administrative and technical in situations of inferiority, subordination or

defencelessness; 2. The consumers and users rights will be protected with priority

when they keep a direct connection with products or services of common use or

consumption, ordinary and generalised; 3. The previous renunciation of the rights this

law recognises the consumers and users to have for the purchase and use of goods or

services is null".

On the other hand, Law 7/98, of 13 April, on general conditions of contracting, states

in its article 9 that "the legal declaration of no incorporation to the contract or of

nullity of the general conditions of contracting can be demanded by the holder in

conformity with the general regulations of contractual nullity", and, in its article 11, it

introduces to us the Register of General Conditions of Contracting in which, among

other things, will be registered "the executives in which steady and estimate sentences

are gathered of any of the acts quoted in the former paragraph. They will also be object

of inscription when it be proved with enough evidence their persistence in the use of

clauses that have been declared legally null".

All of them are clear manifestations that guarantee the access to legal organs in a simple

way and without it being possible to have the minimum doubt about a fundamental right

established in our carta magna tending to defend the interests of any person.

b) From the extrajudicial point of view we have to mention as in a first step the option

contemplated in Law 26/84, of 19 July, General for the Defence of Consumers and

Users, which in its article 31, states that "1. After former audience of the interested

sectors, and of the associations of consumers and users, the government will establish a

mediating system which, without any special formalities, sees to and settles in a binding

and effective way for both parties the claims and requests of consumers and users,

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provided that there is no intoxication, injury or death, nor rational evidence of crime,

all of it without affecting the administrative protection and the legal protection,

according to what is established in article 24 of the Constitution.

2. The submission of the parties to the mediating system will be voluntary and will have

to be especially stated in writing. 3. The organs of mediation will be composed by

representatives of the interested sectors, of consumers and users organisations and of

Public administrations within the area of their jurisdiction".

But the common and most used procedure within the specific area of the banking sector

i to see to the complex of disputes that this one arouses, has its roots in the Order of 3

March 1987, on liberalisation of rates of interest and commissions and on rules of

conduct of the Deposit entities, which disposed the creation in the Bank of Spain of a

Claim Service in charge of receiving and processing the claims customers of credit

entities might put forward referred to the conduct of these entities that might break the

rules of discipline or either the good banking practices and uses in the transactions that

affect them, and gave the Bank of Spain power to regulate its organisation and function,

this last aspect being crystallised in the Ministerial Order of 12 December 1989, on

rates of interest and commissions, rules of conduct, information to clients and

publicity of the Credit entities. Subsequently, the Circular of the Bank of Spain

8/1990, of 7 September, to Credit entities on transparency of operations and

customers protection, and according to the provisions of the former Order, it

introduces as the main novelty of the procedure of processing claims, its previous

formulation before the defender of the client, the general implantation of which

appeared to be of great interest.

On what legal basis are redress procedures based?

Apart from what is state above, referring to the description of the various forms of

access to justice courts and other modalities of defence of the interests of holders of

electronic instruments of payment as consumers and users submitted to so-called

adhesion contracts, there are no legal dispositions on this legal matter here put forward.

What kind of information is provided to holders on the settlement of disputes?

21

Apart from what is state above, referring to the description of the various forms of

access to justice courts and other modalities of defence of the interests of holders of

electronic instruments of payment as consumers and users submitted to so-called

adhesion contracts, there are no legal dispositions on this legal matter here put forward.

In practice, what proportion of disputes are solved through a redress procedure or

out-of-court?

As far as the Servicio de Reclamaciones del Banco de España is concerned, we can see

a progressive number of the total number of claims, that began being 663 in 1987 and

has increased in the following proportion: in 1988, 2115; in 1990, 2902; suffering a

slight drawback in 1990, with 2547; 1991, 2468; deeper in 1992, with 1461; and1993,

with1916; and growing again from 1994 with 2667; and 1995, with 2526 claims

presented.

For what reason would holders be reluctant to solve their disputes in court?

The two reasons for which a holder would be reluctant to contact a legal organ to defend

an interest or a harmed legal right are time and money. Actually, the length of the

procedure and the economical aspect limit the access to judges and courts; and this is

one of the reasons which has impulsed the creation of the Claim Service of the Bank of

Spain; not to replace the legal organs in the field of declaration of rights and obligations,

nor to enter in a complete revision of the legal relationships of the people interested

(aspects which are, obviously, absolutely vetoed), but only to know and settle strictly

banking disputes, limited to concrete transactions.


1.2. Draft legislation

There aren't any specific legal means in Spain to regulate the concrete field of electronic

instruments of payment. In fact and as we have seen along the exposition that has been

made of the matter from a legal point of view, its peculiar characteristic, and the special

22

way of functioning of the banking system, make it even more difficult to make a

decision, although it is absolutely necessary to do so, about regulating such an important

matter.

Finally, the electronic instruments of payment are regulated, at the moment, within

several legal bodies of general character, in a rather uneven banking regulation using as

a Code of Good Conduct the code provided by the European Associations of the

Credit Sector, on 14 November 1990, as an answer to the Recommendation

88/590/CEE, of 17 November.


23

ANALYSIS OF RELEVANT CODES OF CONDUCT

2.1. Overview of the existing codes of conduct / codes of best practices

In Spanish banking practices we have found a code of conduct:

“Código de buena conducta del sector bancario europeo relativo a los sistemas de pago

mediante tarjeta” (Code of best practices of European banks referred to cards used as

payment instruments).

In fact, this code was the answer of different European Banking Associations to the

Recommendation 88/590/EEC of 17 November 1988(Official journal nº L 317,

24/11/1988). And it was written after consulting consumer associations and European

Commission.

It’s important to remark that the Code has to be applied only to those cards (credit and

debit cards, excluding home banking) issued by those entities member of the European

Banking associations which have taken part in the preparing of the Code, as the same

Code establishes.

This “Code of practice of European banks” has been mentioned in a Spanish judicial

resolution: it's the Sentence of Provincial Court of Asturias 8-5-1998, which also

mentions the European Recommendation of 1988.

2.2. Content

This Code of best practices of European banks refered to cards used as payment

instruments applied in Spain is formed by articles 15.

Art. 1 to 5, and art. 10 are refered to transparency of conditions for transactions (articles

3 and 4 of 97/489/EC Recommendation).

Art. 6, a, b, c, e; art. 7, art. 8, art. 9, art. 10. art. 11. Art, 12, art. 13, and art. 14 are

refered to obligations and liabilities of the parties of a contract (articles 5, 6, 7 and 8 of

97/489/EC Recommendation)

24

Art. 6, c, d, art. 11, art. 13, and art. 14 are refered to notification and liability of the

issuer after notification (article 9 of 97/489/EC Recommendation).

Art. 9, and art. 15 are refered to the burden of proof (article 7-2 c of 97/489/EC

Recommendation).

Finally there are no previsions on settlement of disputes (article 10 of 97/489/EC

Recommendation).

2.3. Compliance with the recommendation: apply the compliance check-list

We apply the check-list in order to assess the compliance of the Code of conduct

applied in Spanish banking practices on relation of issuers and holders of EPIs with the

principles set forth in the Recommendation. There are questions included in the check-

list with no answer because they are not ruled in the Code of conduct; it happens

especially with the block of questions about settlement of disputes.

2.3.1. Transparency of conditions for transactions

These questions are based on articles 3 and 4 of the Recommendation.


concluded?

Art. 1 establishes that the issuer of cards will put at the disposal of the holder the whole

of contractual terms and conditions governing the issue and use of the cards. This terms

will tend to the balance of interests of contractual parts. This article does not specified

the moment of this “put at disposal”: prior to the contract or upon the signature of the

contract?

Article 3 establishes that the terms will include the base of calculation of fees,

chargements or payments, but not necessarily the quantity of that fees, chargements or

payments in a concrete moment.

25

Article 4 establishes that the terms will include the period within which the holder's

account will be charged or the period within which he/she will be invoiced.

Art. 5 establishes that contractual terms can be modified by the issuer, but the issuer

will notify previously the holder who will be able to ending the contract. The terms will

establish a period of cancellation. The ending of this period without cancellation of

contract by the holder will be considered an acceptation of new terms by the holder. Art.

5 finally establishes that the modification of rate interest is not governed by this

previous rules and it will be applied since de date established in the publication of this

modification.


Art. 1 establishes that the issuer of cards will put at the disposal of the holder the whole

of contractual terms and conditions governing the issue and use of the cards. This terms

will tend to the balance of interests of contractual parts. As we have said before, this

article does not specified the moment of this “put at disposal”: prior to the contract or

upon the signature of the contract.

Is the information provided in easily understandable words and in a readily

comprehensive form?

Art. 2 establishes that the terms will be set out in a clear way and writing, and will be

available in the official language or languages of the Member State in which the cards

will be offered. There’s not requirement of indication of the law applicable to the

contract (art. 5.1 Recommendation).


Art. 10 establishes that the holder of the card will receive an extract or summary, set out

in writing, relating to the transactions effected by means of the card after a reasonable

period of time. And this article also establishes that the holder will be able to receive a

writing extract or summary immediately after effecting the transaction.

26

According to art. 9, the issuer will keep for a sufficient period of time, internal records

to enable transactions to be traced and errors to be rectified.





Assessment of compliance / non compliance with the Recommendation: 2

3.2. Obligations and liabilities of the parties to a contract

These questions are based on articles 5, 6, 7 and 8 of the Recommendation.

What are the obligations and liabilities of both parties if the EPI is lost or stolen?

Regarding obligations , art. 6, b, establishes that contractual terms will impose to the

holder of the card the obligation of inform to the issuer without delay after becoming

aware of:

-the loss, theft or copy of the card or of the means which enable it to be used,

-the recording on his/her account of any unauthorized transaction,

-any error or other irregularity in the maintaining of that account by the issuer.

Finally, art. 6 establishes establishes that the holder of the card has the obligation of

taking all necessary measures which allow him/her to have notice of the mentioned

circumstances. And art. 14 establishes that since the notification of loss, theft or copy of

the card, the issuer will take measures tending to avoid any other use of the card.

Regarding liabilities,

-on the part of the issuer, art. 11, first paragraph, establishes that the issuer will bear the

loss sustained in consequence of a non-authorised transaction efected by means of the

card when this transaction will be made after the notification from the holder to the

issuer, according to the terms ruling the loss, theft or copy of the card.

27

-on the part of the holder, art. 12 establishes that the holder will bear the loss sustained

in consequence of the loss or theft of the card up to the time of notificatio to the issuer.

The holder will not bear the loss which exceed the limit of ECU 150, except where

he/she acted fraudulently, with extreme negligence, or in contravention of provisions

under Article 6 a, b and c of the Code (corresponding to article 6 (a), (b) and (c) of the

Recommendation). The Code of Conduct allows to increase the limit for high value

cards.

Finally, art. 11, second paragraph establishes that if the holder has acted with extreme

negligence or fraudulently, the holder will bear the whole of the loss produced by non-

authorised transactions carried out after the notification, independently of the obligation

of the issuer of taking all measures in order to avoid any other further use of the card.


obligations and liabilities before the contract is concluded? (or well before the issue

of the EPI)

What precautions do holders take (or are supposed to take) to keep their EPI safe?

Art. 6,a, establishes, in a generic way, that terms will impose to the holder the obligation

of taking all reasonable measures in order to guarantee the security of the cards and the

means of use (such as the personal identification number or any other code).

Art. 6, b, concrete that terms will forbide to the holder writing his/her personal

identification number (or any other code) in a way easily understable by a third person.

Terms impose, in particular, the obligation of non-writing personal identification

number (or any other code) on the card, neither on the documents usually kept with the

card.

On the part of the issuer art. 7 establishes that the issuer will take all necessary measures

in the moment of issuing the personal identification number or any other code and he

will have the obligation of not disclose the holder's personal identification number or

other code, except to the holder;


28

Art. 12 establishes that the holder will bear the loss sustained in consequence of the loss

or theft of the card up to the time of notificatio to the issuer. The holder will not bear the

loss which exceed the limit of ECU 150, except where he/she acted fraudulently, with

extreme negligence, or in contravention of provisions under Article 6 a, b and c of the

Code (corresponding to article 6 (a), (b) and (c) of the Recommendation). The Code of

Conduct allows increase the limit for high value cards.

Finally, art. 11, second paragraph establishes that if the holder has acted with extreme

negligence or fraudulently, the holder will bear the whole of the loss produced by non-

authorised transactions carried out after the notification, independently of the obligation

of the issuer of taking all measures in order to avoid any other further use of the card.

Is the principle of exempting a holder from liability (article 6-3) where the EPI is



On the contrary, art. 6, e, establishes, in general and without exception, that the terms

will impose to the holder the obligation of not countermand an order given by means of

his/her card.

What happen when the issuer alter the terms of the contract?

Art. 5 establishes that the issuer can alter contractual terms, but the issuer will notify

previously the holder to enable him/her to withdraw if he/she chooses. The terms will

specify a period of cancellation. The ending of this period without cancellation of

contract by the holder will be considered an acceptation of new terms by the holder.

However art. 5 finally establishes that the modification of rate interest is not governed

by this previous rules and it will be applied upon the date established in the publication

of such modification.


29

Art. 8 establishes that the issuer does not dispatch an unsolicited card to the clients,

except where it is a replacement for a card already held by the holder;

Assessment of compliance / non compliance with the Recommendation:3

When relevant, reasons why issuers fail to comply with their obligations.

3.3. Notification procedure and liability of the issuer after notification

These questions are based on article 9 of the Recommendation.

Are enough means available "at any time of the day" to enable the holder to notify

the loss or theft of the EPI?

Art. 6,d, establishes that terms will include a point of contact where will be possible to

communicate the notification of loss or theft.

Art. 6, d, establishes that it has to be possible to made this notification an any time of

day or night.

The Code of Conduct also establishes that the issuer can, assuming the risk, not offer

this service of notification during the 24 hour of the day; in this case, the terms will

establish the rules governing the late notifications of loss or theft.

Is the notification procedure easy to follow for the holder? Is sufficient information

provided to the holder as to the functioning of the procedure?

Art. 6,d, establishes that terms will include a point of contact where will be possible to

communicate the notification of loss or theft.

Is the holder provided with a mean to prove his notification?

Is the issuer empowered with sufficient technical means to stop the use of the EPI?

Art. 14 establishes that since the notification of loss, theft or copy of the card, the issuer

will take measures tending to stop any other use of the card.

30

Are there cases where disputes arise between issuers and holders for reason of non

compliance with the reciprocal obligations in case of loss or theft of the EPI?

What EPI/payment system appear the safest for the holder?


3.3.4. Burden of proof

These questions are based on article 7 (2) (e) of the Recommendation.

What does the contract say about the burden of proof in case of dispute about a

transaction?

Is the holder exempted from bringing any proof if he disputes a transaction?

Art. 15 establishes that if the holder denies that the card, or his/her personal

identification number o any other code, have been used in order to carry out a

transaction, or if the holder alleges that the transaction has not been executed correctly,

then the issuer must prove presenting an extract of his internal records that the

transaction has been correctly recorded and accounted and that the transaction has not

been affected by a technical breakdown or any other defect. The correct records of

similar transactions, previous and subsequent to the transaction object of discussion will

be mean of proof of the correct performing of the system.

Previously, art. 13 first paragraph establishes that issuer will be liable for direct loss of

the holder of card produced by a non correct functioning of the system under the direct

control of the issuer. The words “direct loss” are refered only to the main amount of the

transaction charged in the holder’s account, increased, if any, with interest. The word

“direct” (applied to the system) is refered to devices and places where the issuer has

authorised the use of the card.

31

According to art 13 second paragraph the issuer will not be liable of loss produce by a

technical breakdown of system of payments if the holder has been noticed of this

breakdown trough a message in the device or terminal or using any other evident mean.

In relation to the contractual conditions and, if relevant, the existing legislation,

what does the practice show in the area of burden of proof?

Are there any case law testifying the practical situation of holders in front of

issuers?

Is a more binding legislative instrument needed to implement the principle that the

burden of proof falls on the issuer?


3.5. Settlement of disputes



and an issuer available? (both judicial and non judicial redress procedures)



In practice, in what proportion are disputes solved through a redress procedure or

out-of-court?



32

CASE LAW AND/OR ARBITRATION DECISIONS

3.1. Overview

In Spanish law, there are numerous judicial sentences related to electronic payment

instruments. In the period from 1992 to 1999 we have found next judicial resolutions:

fifty four sentences in second instance (Sentences of Provincial Audiences, briefly SAP)

and two in third and last instance (Sentence of High Tribunal, briefly, STS). Observe

that the number of sentences of the High Tribunal considerably decreases, probably

because, for reason of the low economical quantity of the object of judicial claimings,

and in attention to the high expenses that a judicial procedure generates.

The Spanish judicial system is based, in general, and also in the particular case of judicial

claimings regarding electronic payment instruments, on the existence of three levels: a

first resolution, dictated by Judge of First Instance; in the event of appealing, a second

resolution dictated by Provincial Audience; and, finally, in the event of new appeal, a

third and last resolution, dictated by Spanish High Tribunal. In order to complete this

study, we take in consideration the sentences of the Provincial Audiences and those of the

Supreme Tribunal, because they are the most representatives of Spanish judicial

tendencies and opinions. On the other hand, for reasons of time and space, we analyse the

resolutions dictated in the period 1992-1999.

Most of these resolutions are refered to credit cards, some to debit cards and there are

not resolutions regarding electronic money and phone or electronic banking. In attention

to the nature of the issuer, most part of cards has been issued by credit institutions, and

some of them are commercial cards issued by department stores.

In some of the sentences we have found explicit mention to the Recommendation

88/590/EEC of 17 November 1988 (Official journal nº L 317, 24/11/1988) (SAP

Asturias 8-5-1998, SAP Tarragona 2-9-1996).

In order to mention the judicial resolution we apply this system: "SAP Asturias 8-5-

1998": "SAP" means it is a resolution of a Provincial Audience; "Asturias" is the concrete

province; and finally "8-5-1998" is the date of the resolution. In case of a resolution of the

Spanish High Court we apply next system: "STS 8-3-1999", where "STS" means it is a

High Court resolution and "8-3-1999" is the date of the resolution.

33

We have not been able to access to arbitration decisions regarding electronic payment

instruments. The existing statistical data on arbitration cases are refered in a generic

way to financial services, without concreting if any of them are referred particularly to

electronic payment instruments.

3.2. Content

To approach the content of the different and numerous judicial resolutions regarding

electronic payment instruments, we consider useful to form different groups based on

the five thematic blocks proposed for the study of the Recommendation:

In general, judicial decisions are referred to obligations and liabilities the parties, and

specially liability in case the EPI is lost or stolen (second and third block); there are also

several resolutions refered to the fourth block (burden of proof). Regarding some

blocks, there is not case law; it happens especially with the block of questions relatives

to the transparency of conditions for transactions (because they are mainly contractual

questions); and also with questions about settlement of disputes (because they are

mainly extrajudicial questions).

Most of Spanish judicial decisions are referred to obligations and liabilities of the

parties, and specially the obligation of holder in order to keep safe the EPI, the

obligation of holder of notification in case of loss or theft of the EPI, and liability in

case the EPI is lost or stolen (second and third block). There are some judicial decision

relatives to obligations of the parties that can’t be included in any of the questions of the

check-list; so, we have added to new questions at the end of the check-list.

In general, the diverse resolutions are based in the existence of a general obligation of

diligence custody of the card by its holder. In the event of loss or robbery of the card,

the general obligation of diligence is concreted in the obligation of notification to the

issuer entity. In general, the judicial resolutions consider liable to the holder for the non-

authorised operations carried out by third persons before the notification of the loss or

robbery. Since this moment the holder's liability disappears. In the event of negligence

in the execution of this obligation (for delay or non-existence) the tribunals declare

34

liable to the holder of the card for the possible fraudulent operations carried out by third

persons.

As it has been said, the judicial resolutions consider liable to the holder for non-


robbery. Nevertheless, this liability can be attenuate by two ways:

a) in the first place, applying the principle of compensation of negligences. Although, in

the event of loss, in the previous period to the notification, the holder of the card

assumes an objective liability for the possible non-authorised uses until the moment of

the notification, the Spanish jurisprudence doesn't exonerate totally from liability to the

issuer entity in this period. Indeed, the Spanish tribunals keep in mind in some cases,

the lack of diligence of the commercial establishments that accepted the stolen card

without completing the obligation of confirmation of the user's identity. And they apply

in these cases the theory of the compensation of negligences in such a way that the

liability is distributed finally between the holder and the issuer entity (that not

necessarily has relationship with the commercial establishments that have accepted the

stolen card carelessly).

b) and in second place, applying the limitation of liability established in art. 6.1 of the

Recommendation if it has been included in the contract (even, as we will see, in spite of

not being included in the contract signed by the client but in the contracts used by the

bank entity in the emission of cards starting from a certain moment). Nevertheless, in

application of the same art. 6.1. of the Recommendation, the tribunals not consider

applicable the contractual limitation of liability in the cases of serious negligence of the

holder.

So that in general the valuation of the judicial decisions is highly positive. There are

only two negative aspects: in the first place, the insecurity around the concept of celerity

in the notification in the event of loss or robbery: 24 hours?, 2 days?, as soon as

possible?. We think that it not possible a general solution and this question should be

solved case for case. In second place, there are, as it has been seen, different and

contradictory resolutions regarding the confirmation of identity of the user of the card

35

(although it seems that there is a clear judicial tendency in the sense of necessity of

identification).

Regarding the topic or burden of the proof, in the Spanish system there are numerous

resolutions that approach this topic, in general completing in an appropriate way

art.7.2.e) of the Recommendation that settles down on the issuer, in the event of dispute

with the holder on the carried out operations, the burden of proof.


We apply the check-list in order to assess the compliance of Spanish case law on

relation of issuers and holders of EPIs with the principles set forth in the

Recommendation. There are questions include in the check-list with no answer because

there is not case law on the matter; it happens specially with the block of questions

relatives to the transparency of conditions for transactions (because they are mainly

contractual questions); and also with questions about settlement of disputes (because

they are mainly extrajudicial questions). In general, judicial decisions are referred to

obligations and liabilities the parties, and specially liability in case the EPI is lost or

stolen (second and third block); there are also several resolutions refered to the fourth

block (burden of proof).

3.1. Transparency of conditions for transactions



concluded?



comprehensive form?


36





Assessment of compliance / non compliance with the Recommendation: There are not

judicial resolutions refered directly to this questions. So, the assessment is not possible.



Most of Spanish judicial decisions are referred to obligations and liabilities the parties,

and specially to the obligation of holder in order to keep safe the EPI, the obligation of

holder of notification in case of loss or theft of the EPI, and liability in case the EPI is

lost or stolen (second and third block). There are some judicial decision regarding

obligations of the parties that can’t be included in any of the questions of the check-list;

so, we have added two new questions at the end of the check-list.


A) Existence of a previous obligation of custody or safekeeping of the EPI by the holder.

In the event of loss or theft: obligation of notification; negligence of the holder: lack of

notification or delay in the notification.

In general, the different resolutions are based on the existence of a general obligation of

diligent custody or safekeeping of the EPI by the holder. In the event of loss or theft of

the card, the general obligation of diligence is concreted in the obligation of notification

to the issuer entity. Since this moment, the holder's liability disappears. In the event of

negligence in the complying of this obligation (for delay or non-existence) Spanish

courts declare liable to the holder of the card of the possible fraudulent operations

carried out by third non-authorised persons.

37

In that sense, the SAP Barcelona 14-5-1993 establishes that there is negligence of the

holder in the complying of the obligation of safekeeping and the obligation of

notification the loss as soon as possible because the communication does not take

place until more than one month later (negligence that, as we will see, it is compensated

with the negligence on the part of the issuing establishment which did not take the

correct preventive measures of confirmation of identity of the non authorised user of the

card).

The SAP Seville 31-1-1995, in a case of use of lost cards by a third non authorised

person, establishes that there is lack of the due diligence in the custody and conservation

of the cards by their holders, and especially for nonfulfillment of the obligation of

notification to the issuer entity (that simply doesn't exist). And this resolution declares

the holders liable for the payment of the claimed quantities, (and, in this case, as we will

see, there's not compensation of negligences, because the lack of identification in each

use by the issuer (a department stores) is not considered negligent by the court).

The SAP Castellón 26-10-1998 establishes that there is negligence on the part of the

holder in the custody of the card because it doesn't seem that, in attention to the facts

that the client should know (statistic of robberies in the cars parked in the street or in

underground parkings), the best place to keep safe a payment instrument with as much

value as a credit card is not inside the car, and next to the driving license that can

facilitate the identification of the sustractor. But it is considered even more serious

having stopped to take the confirmation measures about the consequences of the

robbery, once appreciated that the right front door of the vehicle had been forced. The

client only acts when he receives one of the communications of operations sent by the

bank and even then there is a delay in the notification to the bank.

The SAP Orense 3-2-1999 solves a case of cash withdrawal by means of a debit card at

a cash dispensing machine which does not belongs to the credit institution issuer of that

debit card; the bank claims the payment of the amounts, and the Court declares liable to

the holder of the card because of the existence of clear negligence in the complying of

safekeeping obligation of the card, because, since the knowledge of the secret key is

essential to use the card in cash dispensing machines, if the card had been lost or stolen,

38

the key had to be in connection with the card, and that made liable to the holder; and if

the card had not been lost or stolen, it was used by the holder, or a third person

authorised by him, with transmission of the secret key.

The SAP of Palencia 3-2-1999 solves a case of robbery of a credit card with cash

withdrawal at a cash dispensing machine; the court declares liable to the holder of the

card because she gave ingeniously to the sustractor the PIN or secret key which let

him to use the card (the holder of the card received a phone call that attributed to an

employee of the issuer, but that really came from the sustractor, convincing her to not

invalidate the card because the theft card and documents were at one of the bank

offices). The court considers that there is a serious negligence that compromises the

security of the card). And this serious negligence excludes the contractual limitation

of liability of the holder (25.000 pts) that is not applied in this case.

B) Negligence of the holder that doesn't exonerate totally to the bank: non-regular

conduct of the business houses, which accepted the cards. The theory of the

compensation of negligences applied by Spanish Courts.

Although, in the event of loss, in the previous period to the notification, the holder of

the card assumes an objective liability for the possible non-authorised uses until the

moment of the notification, the Spanish jurisprudence doesn't exonerate totally from

liability to the issuer in this period. Indeed, the Spanish tribunals keep in mind in some

cases, the lack of diligence of the commercial houses that accepted the stolen card

without completing the obligation of confirmation of the user's identity. And they apply

in these cases the theory of the compensation of negligences in such a way that the

liability is distributed finally between the holder and the issuer (and observe that the

issuer not necessarily has relationship with the commercial establishments that have

accepted the stolen card carelessly). Examples of this judicial practice are the following

ones:

The SAP Barcelona 14-5-1993 consider that negligence exists on the part of the issuing

entity (in this case a department stores) for not taking the appropriate preventive

measures of confirmation of user's identity since it should check if the signatures

coincide and could also check the identity demanding identificative documents. This

39

negligence is balanced with the holder's negligence in the execution of the custody

obligation and the obligation of notification as soon as possible (see section before).

Also the SAP Castellón 26-10-1998 considers abusive the contractual clause that

exonerates totally to the bank from liability for transactions carried out with theft cards

before the notification (without keeping in mind the circumstances of the concrete case).

In the concrete case, the business houses which accepted the cards had a non regular

conduct because they accepted payments with the theft cards without demanding the

client's identification and they accepted signatures not very similar to the holder

signature. The courts considers that in this case, once produced an anomaly in the sale

circle by means of credit card, is the bank, and not the holder, who has the means to act

against the business houses. In any event, the theory of compensation of negligences is

finally applied by the court (because there is also negligence on the part of the holder of

the card in the custody, see section before), and this applying decreases the quantity to

pay by the holder.

Equally, the SAP Madrid 29-7-1998 does not admit a claiming of quantity for the

amount of articles paid by means of a commercial card issued by the department stores

because it has been proved that the signature of the transactions ticket doesn't belong

together with the signature of the holder of the card. Then, there is a lack of diligence of

the employees of the issuer commercial for not demanding the identification of the

user of the card.

On the contrary, the SAP Seville 31-1-1995, in a case of non authorised use of a theft

card, considers that there is not lack of diligence of the issuer entity (department stores)

in the confirmation of identity and signatures because “the execution of the diligence

duty in the confirmation of signatures and identities can not force to the entity… neither

to none of its salespersons or employees to act as experts calligraphers in all and each

one of the cases of use of cards, this conduct on the other hand would be in open

contradiction with the speed and the characteristics of the commercial traffic and with

the enormous volume of operations that are carried out every day,” being enough a

superficial exam and not being obligatory the identification by means of the

exhibition of the National Document of Identity of all and each one of the real buyers.

40

In conclusion, the jurisprudence is contradictory: there are resolutions in two directions,

but the majority tendency demands the confirmation of identity by business houses.



of the EPI)


The SAP Castellón 26-10-1998 is an example of situations where the courts consider

that the due cautions to maintain safe the EPI have not been kept : “it doesn't seem that,

by the light of facts that the client should know (index of robberies with force in the cars

parked in the street or in underground parkings), the safest place to keep a payment

instrument with as much value as a credit card is not inside the car, and next to the

driving license that can facilitate the identification of the sustractor.…”


In general, Spanish judicial resolutions consider liable to the holder for the non-


robbery. Nevertheless, this liability can attenuate by two ways: in the first place,

applying, as it has been mentioned, the principle of compensation of negligences; and in

second place, applying the limitation of liability established in art. 6.1 of the

Recommendation if it has been included in the contract (even, as we will see later on, in

spite of not being included in the contract signed by the client but later in the contracts

used by the bank).

Nevertheless, according to the prevision of the same art. 6.1. of the Recommendation,

the tribunals consider not applicable this contractual limitation of liability in the cases of

serious negligence of the holder.

This way, the SAP of Palencia 3-2-1999 solves a case of robbery of a credit card with

cash withdrawal in a dispenser machine. The resolution does not apply the contractual

limitation of liability of the holder of the card in the event of fraudulent use by third

41

persons (25.000 pts. and whenever the loss or robbery was notified in 24 hours)

because, in that case, that use was possible because of serious negligence of the holder

that facilitated to the sustractor the secret key or PIN.

In this sense, the SAP of Barcelona 25-1-1999 considers non applicable the limitation

attending to the nonfulfillment on the part of the holder of the obligation of notifying to

the bank the loss or subtraction of the card as soon as possible: the robbery was not

notified until five days later, during four days the holder didn't worry about checking

if the cards were safe.



The SAP Asturias 8-5-1998, in a case of fraudulent use of card by a third person in a

foreign country, declares exempt of liability to the holder that proves that he was not in

that country during the period in that transactions were made, and denounces the facts

and delivers the card immediately after the first transactions are charged to his account,

refuting as false the signatures of the transaction tickets. The court considers that

everything endorses the verisimilitude of the position that maintains the holder that the

system of security of the card or its magnetic band has been manipulated or copied

during a previous travel to the mentioned country, when he used the card to pay in a

hotel. It would be application of the principle of exemption of art. 6.3 of

Recommendation, but it is not applied completely and exactly since finally it is applied

the limit of liability of 25.000 pts. of art. 6.1, application that we consider non-correct

attending to the liberality of art. 6.3 that excludes the application of art. 6.1 and 6.2.



The SAP of Barcelona 25-1-1999 approaches next situation: once signed the contract of

card issuing by the holder, in a later moment the issuer modifies the conditions of the

contracts that he is going to use with his new clients, including a new clause of

limitation of liability that evidently favour the clients. The question is if that clause, not

42

included in the previous moment of signature of the contract by a holder, is later

applicable since the moment that becomes a clause habitually used by the bank entity in

its contracts. To solve this question, the mentioned sentence establishes that the card

contracts are being renewed in a tacit way as the cards expire and therefore they are

governed by the general conditions that figure in each moment printed in the contracts

that the bank entity facilitates to their users and not for those that could contain the

contract signed in the past, if these new conditions are more favourable to the holder. In

this case, with this judicial interpretation in favour of the holder, the court applies a

clause of limitation of liability non-existent loss in the moment of the signature of the

initial contract (1988) but already included in all contracts signed by the entity with its

clients starting from 1996.


Does the issuer completes the obligation of not revealing the PIN but the holder

(art. 7.2.a)?

This question has been added in spite of not being included in the check-list because is

an obligation established in art. 7.2.a) and there is a judicial resolution on this

obligation.

The SAP Málaga 9-9-1994 declares the liability of the bank whose negligent employee

gives a card, together with the number of personal identification, not to the holder but to

one of his workers (applying finally the compensation of negligences since the holder

didn't denounce any irregularity in the established contractual term after the reception of

the extracts).

Application of the general obligation of diligence to the case of cancellation or

revocation of cards.

This question has been added, in spite of not being included in the check-list, because

there is a judicial resolution that, starting from the existence of a general obligation of

diligence of the parts, declares liable to the issuer entity in a case of non diligent

cancellation of a credit card.

43

The STS 15-11-1994 approach a case of irregular cancellation of a credit card that

caused a serious damage to the holder (and their heirs) because it stopped him to pay an

ticket airplane with credit card and it stopped him to travel with the covering insurance

for trip accidents that in another case he had been able to have; and, in this case, the

damage is real because the holder of the card died in aircraft accident. Attending to

these facts, his widow claims to the bank entity the quantity corresponding to the

compensation that, in another case, she had been able to obtain with the trip insurance.

The Spanish High Court declares the existence of negligence of the bank that cancelled

the card of a client unduly; the cancellation is irregular and not justified because it

was caused by the existence of two homonymous clients (two clients with the same

name); one of them has no money in his account and this situation causes the

cancellation of the card of the second homonymous client (which has money enough in

his account). The Spanish High Court declares that the existence of negligence of the

bank because it had means to identify the doubtful client (for example, use of other data

as the number of national identification number).Nevertheless, the Court applies the

compensation of negligences because the holder of the card, if he had wanted it, had

been able to contract an insurance policy that covered him for that concrete trip.










44




Most of judicial resolutions of the Spanish Courts are refered to cases of loss or robbery

of cards, and in particular to the nonfulfillment or negligent execution of the notification

obligation on the part of the card's holder. We don't reproduce here their content

because it has been reproduced in previous section (3.2).


Assessment of compliance / non compliance with the Recommendation: There's no

assessment because there are not judicial resolution about these questions.

3.4. Burden of proof


The judicial resolutions of period 1992-1999 included several resolutions refered to this

fourth block (burden of proof).


transaction?





issuers?

In Spanish system, there are numerous sentences that approach the topic of the burden

of proof, in general completing in an appropriate way art.7.2.e) of the Recommendation

45

that establishes the burden of proof on the issuer in the event of dispute with the holder

on the operations carried out with the card.

In that sense, the SAP Madrid 9-6-1998 (in the same sense that the SAP Alicante 18-1-

1993, SAP Alicante 30-1-1995) establishes very clearly that the issuer entity has the

duty or burden, generically imposed by art.1214 of the Civil Code, of crediting or

proving those facts or acts which are the base of its reclamation right. And,

applying this principle, in the concrete case of the resolution, the court declares

unfounded the claiming of quantity made by the issuer entity attending to the lack of

evidence or proof of extrajudicial communication of the quantities charged in the

holder's bill, and the lack of evidence of the cause of these charged quantities (if it was a

cash withdrawal, with identification of day, hour and place, or if it was the payment of

goods or services with expression of the establishment and the town where they were

acquired or provided) in spite of being the own issuer bank who has all the information.

In the same sense, the SAP Coruña 2-2-1998, in case of use of the card for cash

withdrawal in dispenser machines considers enough proof the communication of

the different records existing in the central of operations (in this case the VISA

system): the records done through the communication of the operations of the dispenser

machines are an electronic testimony that evidently is impartial, although it can be

erroneous due to the existence of some anomaly in the functioning of the system. But

what is not possible to demand is that the entity proves the correct functioning, in the

dates the cash withdrawal were done, of every dispenser machine that was used (most of

them were not in its branches), since the correct operation is the normal situation and

the anomalies the exceptional situation. And also the person who can detect the

anomalies is the holder of the card who knows the use that made of the card and who

obtains the corresponding receipts or vouchers. So the proof of quantities charges

refered to cash withdrawal in dispenser machines of VISA must be considered enough

to credit their correspondence with the reality. Regarding those charges that seem to

correspond to operations in commercial establishments, since any document voucher is

delivered, they cannot be considered proved and their claiming is rejected.

So, in general, Spanish Courts approach the topic of the burden of proof establishing the

burden of proof on the issuer in the event of dispute with the holder on the operations

46

carried out with the card. Nevertheless, and starting from this principle, generally

admitted by the jurisprudence, that corresponds to the issuer entity proving which were

the operations carried out by the holder of the card:

-in the first place, it's important to remark that there are some sentences that consider

enough the certification of the debt of holder's account and the listing with the operated

movements, in the case of periodic remission by the bank entity of the movements or

extracts without claiming by the holder in the contractually established term (SAP

Alicante 2-11-1994, SAP Tarragona 2-9-1996, SAP Soria 2-9-1996, SAP Madrid 21-7-

1997, SAP Málaga 2-7-1998). In the same sense, SAP Seville 19-2-1998 considers that

the lack of objection in the term of thirty days (according to clause of the contract) of

the charges made in the holder's account and notified by remission of the extract to the

holder supposes the conformity with the indebted balance; so that this resolution

considers the certification of the debt and the delivering of copy of the extracts of

operations periodically sent to the holder are enough proof, and that they are

considered sent and received because the parts in any moment have manifested that it is

the first moment they have notice of this debt. In the same way, SAP Málaga 2-7-1998,

SAP Barcelona 7-9-1998, and SAP Las Palmas 29-9-1998, also consider that it doesn't

suppose a probatory privilege in favour of the financial entities but distribution of the

burden of proof according to the principle of the easiest proof.

-in second place, sometimes Spanish Courts consider particular circumstances. The SAP

Balearic Islands 4-2-1999 declares reasonable the claiming, without necessity of proof

of the particular operations, because the holder of the card alleges a robbery of the card

in 1991, but there's not objective evidence of that robbery, neither there's evidence or

proof, since then on and in the following years, of any claiming or objection of the

holder after receiving the corresponding extracts of the account.





47







out-of-court?



48

DISPUTE SETTLEMENT MECHANISMS

4.1. Overview of existing dispute settlement mechanisms

A) Judicial mechanisms . As it has been shown, the disputes regarding electronic

payment instruments resolved by Spanish Provincial Courts from 1992 to 1999 are 57,

and only few of them have arrived to the third and last instance of the Spanish High

Court (2).

With the analysis of the Spanish jurisprudence we have detected the existence of

contradictory approaches relative to the determination of the competent court that can

cause insecurity. The SAP Guadalajara 1-10-1998, applying the legislation of the

European Union on consumer protection, considers that the competent court for the

resolution of disputes relative to credit cards is the court of holder's address, and it

establishes that clauses of submission in another sense should be considered abusive

clauses. But other resolutions consider that the competition doesn't correspond to the

Tribunal of the holder’s address (Auto Audience Provincial de Madrid 4-3-1998).

Anyway, it must point out that one of the scarce sentences of the Spanish High Court

regarding credit cards approaches this question considering abusive a clause of

expressed submission to a tribunal different from the holder’s address since it can

suppose an obstacle to the exercise of actions for the consumer (STS 30-5-1998 in direct

application of the Directive 93/13, and that today it would lead us to the First Additional

Disposition, paragraph 27 of the General Law for the Defence of consumers and user of

1984, in the writing given by the Law of general conditions of contracts of 1998).

B) Extrajudicial mechanisms:

We can distinguish two different mechanisms for the settlement of disputes arisen in the

banking sector, though the peculiarity, personal feature and form of conduct that

surrounds the whole sector, actually reduces them to a unique mechanism for effective

generalised application, with the results that we will subsequently analyse in what

respects the concrete matter of electronic instruments of payment.

49

The first one is provided by article 31 of Law 26/84, of 19 July, General for the

Defence of Consumers and users , which establishes that "1. After previous audience of

the interested sectors and of the Associations of consumers and users, the Government

will establish a mediating system that, without any special formalities, sees to and

settles in a binding and effective way for both parties the claims and requests of

consumers and users, provided that there is no intoxication, injury or death, nor

rational evidence of crime, all of it without affecting the administrative protection and

the legal protection, according to what is established in article 24 of the Constitution.

2. The submission of the parties to the mediating system will be voluntary and will have

to be especially stated in writing. 3. The organs of mediation will be composed by

representatives of the interested sectors, of consumers and users organisations and of

Public administrations within the area of their jurisdiction".

This is in what actually consists the so-called arbitration of consumption, to which in a

general way, can submit the interested parties in a contract in which consumers and

users take part, established on parameters of simplicity and conceived to speed up the

processing of claims and disputes arisen in this field and avoid the long delays and the

expenses caused by the legal procedure.

Nevertheless, this mediating procedure is not the one usually used by consumers or

users of a banking service or product to process and put forward the claims caused by

the malfunction of the contracted service or product. In this matter, and though the

mediating system is one of the options provided to the consumer, generally, the disputes

arisen within the banking system usually follow the procedure established to put

forward the corresponding claim before the Client's Defender and afterwards before the

Claim Service of the Bank of Spain.

The Claim Service of the Bank of Spain. We have already explained that the Order of 3

March 1987, on liberalisation of rates of interest and commissions and on Rules of

conduct of the Deposit entities, decided the creation within the Bank of Spain, of a

Claim Service in charge of receiving and process the claims that might be put forward

by the customers of the Credit entities about the conduct of these that might break the

rules of discipline or the good banking practices in the course of the transactions

50

affecting them, and gave the Bank of Spain power to regulate its organisation and

function, ordering that the initiation of its functions should take place on 1st. September

1987.

To develop this legal mandate, the Executive Council of the Bank of Spain, in its

session of 26th. May 1987, created the Claim Service, and on July 21st. 1987, it dictated

the Circular number 24, regulating its organisation and function, programming it to

come into effect on the 1st. September1987, and situating its headquarters in its central

office in Madrid.

Its finality, as it has already been announced, is receiving and processing the claims

related to concrete operations affecting them, put forward by the customers of Credit

entities under the authority of the Bank of Spain, on the conduct of these that might

break the rules of discipline or the good practices and banking usesg. The processing of

claims is gratuitous and can be put forward by any person, either physical or legal,

client of the Credit entity, in connection with concrete transactions affecting them.

Subsequently, the changes introduced by the ministerial Order of 12 December 1989

and the already mentioned Circular of the Bank of Spain (Banco de España) 8/90, of

7 September, developing the former, stand out because they enhance the extension of

the area of responsibility of the Claim Service for the claims that could be put forward

by the customers of credit entities different from the entities of deposit, and they create

the figure of the consumers´defender or equivalent organ. In this way, in the chapter II

of Circular 8/90, which bears as its title Organisation and function of the Claim

Service, its rule fourteen establishes that "for the admission and process of claims

before the Service, it will be indispensable to prove they have been previously

g Rules of discipline: They are rules of conduct contained in legal regulations or

imposed to the Credit entities by the Bank of Spain, in virtue of the power granted to it by theregulation. They are dedicated to guarantee the good function of the credit establishments andthey regulate many aspects of their activity ( for instance, financial publicity, obligations ofinformation, communications to customers, fees for transactions and services, form ofexpression of the rates of interest, valuation rules, etc)Banking uses: They are those commercial and banking uses accepted as common in the placesconsidered.Good banking practices: those which, without being imposed by the disciplinary regulation norbeing of banking usage, can reasonably be demanded for the sake of the responsible, effectiveand respectful management of the banking business.

51

formulated in writing before the costumers´defender (or equivalent organ) of the credit

entity, if it exists. The costumers´defender will have to acknowledge receipt in writing of

the claims put forward before him".

The same Rule Fourteen adds that "if the costumers´defender refused to admit the

claim, refusal which in any case would have to be justified, or if the solution were not

satisfactory for the demander, or if two months had passed since the date of its

presentation without a solution, the demander will be allowed to put forward his claim

before the Service (...)" and that "to these effects, it will be consider that there is a

costumers´defender when an entity or group of entities have established or submit

formally to an institution or organ created to safeguard the rights and interests of its

customers, and have it communicated to the Bank of Spain".

The processing of claims on matters of commercial policy (for instance, the denial of a

loan) and of those which correspond to courts of justice, are part of the area of

responsibility of the Service. Nor is responsibility of the service the valuation of

possible damage, or ordering the payment of appropriate amounts.

The Service will also reject the claims on which mandatory report would have been

made, and those object of dispute before the courts of justice. In the same way claims

put forward by customers of credit entities referring to arrange operations or facts that

have occurred more than five years before will be rejected.

Concerning the way of formulating the claim, (rule fifteen), this will have to be put

forward in writing, quoting:

a) Name, surname and address of the demander, and if it is the case, of the person who

represents him, justifying the representation. Number of identity card for the physical

persons and details of public registration for legal ones.

b) Registered name and name of the Entity to which the writing refers, and office or

offices where the facts object of the claim have occurred.

c) Facts, reasons and petition in which the matters on which the Service is asked to

declare itself are to be clearly stated, being especially quoted that they are not object of

dispute before the courts of justice.

52

d) Note certifying that the claim has been presented to the costumers´defender of the

demanded Entity, if it exists, justifying this presentation with a note, or if that's the case,

the denial of its admission or the settlement delivered.

e) Place, date and signature.

Furthermore the claimant will have to provide the documented proofs which support his

claim.

Rule seventeen clarifies that, once the claim has been received, a file will be opened. If

the identity of the demander or that of the affected Entity were not sufficiently justified,

if the facts object of the demand could not be clearly state, or if there were no proof of

having put it forward previously to the costumers´defender, the signatory would be

requested to complete the information in a ten-day period.

Before the conclusion of the case, the Entity to which the claim refers will have to be

heard. All the requests put forward to the Entity will have to be carried out in a period

of ten working days, and if there were no answer after that, they will be declared

unreliable, and the process will be carried on (rule nineteen).

As a general rule, the file, which will have to be settle in no more than three months,

will conclude with a justified report. This report will have to contain clear conclusions

in which it will be stated if the exposed evidence proves that the rules of discipline have

been broken and if the Entity has respected or not the good banking uses and practices.

This report has no executive value.

If, having seen the report, the Credit entity should correct its situation with the

demander, according to the stipulations in the settlement, it will have to be known by

the Bank of Spain in a maximum period of a month starting from the date of notification

of the report, proceeding to its filing. If no news are received in the stipulated period,

the file will remain as a precedent for the appropriate legal purposes (rule 23).

If the actions carried out should break the rules of discipline, or signs of criminal

conduct or tax infraction , change control, consumption or competition , or signs of

another nature, should be detected, the legal Services would warn the Executive

Commission for the corresponding purpose. Furthermore, in the case of breaking or

53

abandonment on behalf of the parties, without any prejudice for the disciplinary

responsibilities, or from any other relevant point of view, the service will formulate to

the Entities the instructions it will consider appropriate (Rule twenty-four)

Finally, it is necessary to recognise that though the reports issued by the Claim Service

of the Bank of Spain are not binding, they have become a fundamental means of

settlement of disputes because of its quick processing and its practically generalised

acceptance and subsequent implementation.

The most important concept is that we need first to go before the Client's Defender

and then we can present the claim before the Claim Service of the Bank of Spain,

and the decision of this body is not mandatory for the Banks. This point is really

important but on the other hand we have to admit that the credit institutions use to

observe and accept the decisions.

4.2 Compliance with the Recommendation: apply the compliance check list.

In Spanish system there are not specific mechanisms of resolution of disputes regarding

electronic payment instruments. The holders use the judicial or ordinary extrajudicial

mechanism. Among extrajudicial ways, the extrajudicial administrative procedure of

claiming established in general for the bank clients is frequently used: it's the Service of

claimings of the Bank of Spain (previous compulsory claiming to the bank client's

defender). And also, as extrajudicial road, the procedure of arbitration that has been

previously explained.

As we have just mentioned in the above paragraph, we are going to concentrate on

the specific analysis of the claims put forward before the Claim Service of the Bank

of Spain, that we will go on to describe while answering the check list questions.

4.2.1. Transparency of conditions for transactions.


concluded?

54

The suppositions of information about contractual conditions are gathered in the

supposition of the following question, for it is at that moment when the customer is

given a concrete information on the conditions under which he is contracting and the set

of liabilities and obligations that correspond to them.

Therefore, in this first case that now interests us, we could only include the suppositions

of a certain publicity issued by the entities that finally crystallise in a contract for the

obtention of an electronic instrument of payment. Nevertheless, in this first point it may

be of interest to notice the Claim 1059/88 on CREDIT CARD RENEWAL WITHOUT

THE HOLDER´S AGREEMENT AND DEBIT OF THE CORRESPONDENT

EXPENSES. In this case the entity, once the validity period of the credit card requested

by the customer has expired, sent this one a new one, debiting in his account the amount

corresponding to the concept of card renewal, understanding that, until the client does

not formulate formally the request of cancellation, the contract remained in vigour.

Well, the Service considered that, as the regulating agreements of the credit card stated

the validity period of the card in terms of expiry, it had to be understood that the card,

and therefore the liabilities and obligations incorporated to it became extinguished

directly and automatically, without having to refuse the renewal, not even verbally, and

in order to renew them, the card would have to be renewed, which would require a new

agreement of the parties (one would have, in this case, to duly inform before

considering formalised a new credit card contract)


In reference to the information provided at the time of formalising the contract, in

several claims, the limits and the necessary information that has to be state in every

credit contract are getting profiledh. Therefore, from now on, we are going to enunciate

and describe in a detailed way, following a chronological order, the reports of the Claim

Service in which such problems and their solutions are gathered.

8 On this matter, it is convenient to clarify that all the claims referring to electronic

instruments of payment are gathered under the title credit cards, and that there are not, for thetime being, any other specific mentions concerning the other instruments taken into account inthe Recommendation of 1997.

55

In Claim 1057/89, against Banco de Santander, for INDECISIVENESS OF THE

MAXIMUM DAILY LIMIT OF CASH DISPOSITION IN AUTOMATIC CASHIER,

the Service estimated that the entity, by forgetting to fix and record the maximum daily

amount of effective available funds linked to the 4B conceded to the demander, leaving

this condition undefined, it didn't comply with the requests of the good banking

practice, for the indecisiveness of that condition is not consistent with the policy of

transparency inspired by the regulation in vigour in order for the customers of the credit

entities to know exactly the conditions of the transactions they agree on with them. this

was also the object of the claims 330/90, against Banco Herrero; 2168/90, against

Banco Popular.

In Claim 2545/90, against the Banco de Santander, about the NON-EXISTENCE OF

THE CONTRACTUAL DOCUMENT OF CREDIT CARD, the Service states that not

writing the contract implies the infringement of what is considered fundamental for the

sake of clarity, transparency and good balance of the services, and is, furthermore, a

request of Recommendation 590/88 and of the Code of Good Conduct for the protection

of consumers and users in matters of payment. The same object is dealed with in Claims

714/92, 494/93, 603/93, 948/93 and 1206/93 against the Banco de Santander,

177/93,and 535/93 against BBV; 1009/93 against the Banco de Madrid; 2545/90,

against the Banco de Santander and 791/94 against the Banco de Santander, which,

even though they must also be included in the cases of issue of credit card without the

consent of the demander, the Service insists on the fact that they are a clear case of

infringement of the good banking practice, because it is considered fundamental for the

sake of clarity, transparency and good balance of the provisions, to gather and stipulate

in writing the contractual conditions of the transaction, as it is stipulated in the first

clause of the Code of Conduct for the protection of consumers and users on matters of

payment. The same aspects in Claims 2350/95; 375/96; 662/96; 890/96; 1265/96;

2275/95; 148/96; 815/96; 1595/96; 1088/96; 1623/96; 2602/97; 2866/97; 54/98; 92/98;

366/98; 2021/97; 2034/97; 2185/97; 2907/97; 1566/97; 2293/97; 2639/97; 253/98;

381/98; 241/98; 964/98; 1593/98; 566/98; 266/98; 1522/98.

Claim 1853/93 against the Banco de Santander: INADEQUATE INFORMATION TO

THE HOLDER ON THE LIMITS OF HIS CARD. In this case, the service understood

56

that the non-existence of any allusion to the limit of the holder's responsibility in the

contract, such limit being quoted in the Code of Good Conduct of the European Bank on

matters of means of payment, was against good usage and practice in banking.

In Claim 945/92, against Caja de Ahorros de Madrid, on CHARGE OF COMMISSION

THAT WERE NOT STIPULATED IN THE CONTRACT, the Service understood, in

the case of commission for using cards in nets distinct from those to which they

belonged, that even though they were taken into account in their duly registered fees in

the Bank of Spain, but not evident in the contract, the entity had broken the good

banking practice and usage. The same object in Claim 1102/94 against Caja Postal.

In Claim 906/96, against Caja de Ahorros de Madrid, about CONTRACT SIGNED BY

THE ENTITY THAT DON'T FULFILL THE BASIC AND MINIMAL

REQUIREMENTS, The Service understood that the contract had important lacks

because it didn't include essential mentions of the Sixth Rule, section 11, of the

Circular 8/90, of 7 September, such as the system of payment chosen and the

commissions or rates applicable. The Circular 8/90, of 7 September confirm that the

contract must include the amount, number and date to fulfil the payments and the

specific rates, comissions and other expenses.

In the information provided stated in easily understandable words and in a readily

comprehensive form?

It is worth mentioning the Claim 161/90 against La Caixa, on ALTERATION OF THE

DATE OF CHARGE OF DISPOSITIONS MADE BY CARD. The Service understood

that the change operated by the entity was carried out taking into account clauses

lacking precision not consistent with the policy of transparency inspired by the

regulation in vigour, in order for the clients to know fully the conditions of the

transactions they contract.


57

We may quote Claim 1034/92 in which Caja Madrid is considered not to have complied

with the banking regulation, not expressing with clarity in the statement of account the

concept to which the commission due, object of the dispute, corresponded.

On the other hand, in Claims 263/92 against Caja de Ahorros de la Inmaculada de

Aragón; 698/92 against Caja de Ahorros de Cataluña, 826/92 against Banco Exterior de

España; and 982/93 against Banco Natwest España, concerning PROOF OF

UTILIZATION OF CARD, state cases of debit of amounts on behalf of the entities on

cards that had been robbed. The Service considered that the entities has broken the good

banking practice because of the fact that the demanders had requested from the entities

the corresponding invoices or proofs of the dispositions carried out, without their being

issued. The entities must deliver, when the customer so requests, the correspondent

evidence of debt; they also have to take, in defence of their costumers´ interests, all the

necessary steps towards their securing.

On the other hand, in Claim 2267/90, against Banco Atlantico, on CHARGES FOR

USING CARD TO PAY BILLS NON-AUTHORIZED BY THE COSTUMER, the

Service understood that the entity didn't comply with the good banking practice, for not

having respected, in the debit of the referred amounts the stipulations of clause 10 of the

Rules of VISA cards of the proper Banco Atlántico, which the card complies with, in

which it is stated that "in the transactions in which the means of identification is the

signature of a bill, the holder will accept as the amount the one who stands on the bill

signed by him", which was not the situation in the present case.

Claims 83/92; 408/93; 424/93; 640/93; 543/93; 408/92 about UNJUSTIFIED DELAY

TO CARRY OUT THE CHARGES, TO TRANSMIT THE DATA OF THESE

CHARGES AND TO INFORM ABOUT THEM, the Service understand that this

behaviour is not correct taking into account the technical meanings that the entities have

to comply with their obligations. We can also include Claim 799/93.

In Claim 448/92, against Caja de Ahorros de Madrid, the Service established that the

entity had broken the good banking practice and usage when CHARGED MONEY

WITH A DATE PREVIOUS TO THE REAL USE OF THE CREDIT CARD.

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Claims 1134/93, 1424/93 and 486/95 about LACK OF EXPLANATIONS AND

NECESSARY INFORMATION TO THE HOLDER ABOUT OPERATIONS

COMPLETED WITH THE CREDIT CARD. The Service understood that the entity

must provide the holder some necessary information about concrete operations because

it is demanded by the general principles of transparency and clarity.

In Claim 530/96, the entity didn't comply with the good banking practice by ISSUING

A CREDIT CARD TO A MINOR. The entity had to know and prove that situation and

adopt the respective measures because in that case the minor needed the help of the

legal representative.



There are no claims on this concrete point.

⇒ Assessment of compliance / non compliance with the Recommendation: 4

4.2.2. Obligations and liabilities of the parties to a contract


In reference to the obligations and liabilities we should analyse several points.

In Claim 1235/88, about LIABILITY OF THE CREDIT INSTITUTION AFTER THE

COMMUNICATION OF THE HOLDER WHEN THE CREDIT CARD (EPI) HAS

BEEN LOST OR STOLEN, the Service understood that the strict liability related to the

functioning of a system whose risks and limitations are only known by the entity, can’t

be charged to the holder and we can’t accept the contractual clauses exempting the

issuer of liability. Consequently, the Service estimated that the entity infringed the

good banking practice by charging the holder the different operations with the credit

card after the notification of the loss or theft. The same object is dealed with in

Claims1001/93 and 1192/93 against Banco Zaragozano; 189/93 and 523/93 against

59

BBV; 150/93 against Banco Español de Crédito, 1830/95 against Caja Postal and

1099/96 against La Caixa; Claim 1366/90, against Banco Bilbao Vizcaya, and 2373/94;

1933/94.

In Claim 1555/89 against Banco de Santander, about the PROCEDURE TO DELIVER

THE CREDIT CARDS, the Service understood that the procedure chosen to deliver the

cards to the specific holders didn’t agree with the good banking practice, because the

entities were generating an important risk of loss or use by a third party (predictable and

avoidable in opinion of the Service) and this risk was charged to the holder without

justification and no express mention in the documentation provided to the proceedings.

In the same direction, the Claim 1941/89 against Caja de Ahorros y Monte de Piedad de

Madrid; 1609/90, against Bankinter; 169/92; 1002/92; 276/93; 339/93; 912/93 against

Caja de Ahorros de Madrid, 121/92; 320/92 against Caja de Ahorros del Mediterráneo;

1215/93 against Caja de Ahorros de Valencia Castellón y Alicante; 79/93 against BBV

and 1290/92 against Banco de Santander; 1759/93; 187/94 y 822/94 against Banco de

Santander; 2423/94; 711/95; 480/95; 308/95; 1652/95 against Caja de Ahorros de

Madrid; 1079/95 against Banco de Murcia; 515/95; 1698/95; 1767/95; 1961/95 against

Banco de Santander; 380/96; 858/96; 1133/96, 2522/95 and 1522/98.

Claim 944/92 against Caja de Ahorros de Madrid, about the INCORRECT DELIVERY

OF A CARD AND ITS SECRET NUMBER TO AN INCORRECT PERSON (NOT

THE REAL HOLDER). The Service said that it was a dangerous situation and

absolutely opposite to the good banking practice.

Claim 1558/89, against Banco de Santander, about LIABILITY OF THE ISSUER FOR

OPERATIONS CELEBRATED AFTER THE NOTIFICATION OF THEFT. The

Service said that the issuer didn't comply with the good banking practice by charging

the amounts to the holder because the operations took place after the notification.

Claims 639/92, 982/93 and 350/93. In these cases, about FRAUDULENT USE OF THE

CREDIT CARD, the Service gave the right to the holder because the issuer didn't the

documentation and instruments to prove the existence of the contract and because the

entity had destroyed the receipts to make evident the operations. This behaviour attempt

against the good banking practice and fails to fulfil the article 30 of the Código de

60

Comercio (Commercial Code), that obliges the issuer to keep and preserve the

documents during 6 years (from the last registration in the books).

In the Claim 801/93 against Bex Directo, the Service established first that "beginning

with the doctrine which affirms that the liability for the operations made before the

notification concerns the holder and the operations after the notification concerns the

issuer", in this case had to be liable the holder, but the Service observed that it is against

the good banking practice to have a delay of 68 days to notify the client the concrete

information about the exact moment in which the operation took place.



of the EPI)

We have included several cases about this concrete aspect in the course of this study.


There are no specific claims related to this concrete point.

What is the amount of the holder’s liability before notification?

Claims 982/93 against Banco Natwest España; 1411/92 and 603/93 against Banco de

Santander; 617/93 against Caja de Ahorros de Madrid; 499/93 against Caja de Ahorros

y Pensiones de Barcelona; and 1000/92; 380/92; 692/93; 1858/93; 1246/93; 401/94;

491/94; 316/94; 17/94; 318/94; 728/94; 961/94; 1375/94; 770/94; 337/94; 1318/94;

523/94; 590/95; 510/95; 1019/95; 1848/94; 264/95; 312/95; 1012/95; 1089/95; 1397/95;

638/95; 1130/95; 946/95; 1307/95; 1124/95; 1902/95; 353/95; 2101/94; 2186/94;

2418/94; 2495/94; 1795/95. The Service understood that the issuers didn't comply with

the good banking practice because they didn't apply the LIMIT OF LIABILITY

DEMANDED in the clause 12 of the Code of best practices of European banks refered

to cards used as payment instruments, of 14 November 1990, that establish the limit of

150 ECU's. On the other hand, the Claims 1351/92; 1337/93; 293/93; 1805/93; 976/93;

785/94; 15/94; 1163/94; 424/94; 1881/94, 2602/97; 537/98; 582/98; 1437/98; 492/98;

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859/98; 275/98; 528/98; 774/98; 164/98; 2496/98; 98/98; 1112/98; 386/98; 641/98;

464/98; 2348/97; 2473/97; 2523/97 recognise that limit and affirm that the issuers that

don't apply it because of an accusation based on an unjustified negligence done by the

holder, are acting against the good banking practice. And in the Claims 88/95; 234/95;

246/95; 495/95; 982/95; 2084/94; 2093/94; 251/95; 2453/94; 804/95; 384/95; 2137/94

the issuers don't FIX IN THE CONTRACTUAL CLAUSES ANY LIMIT OF RISK OR

LIABLILITY.

Claims 1423/96; 1500/96; 787/96; 812/96; and 784/96 against Banco Central Hispano,

2020/95; 1101/96 against BBV, 2509/95 against Deutsche Bank; 2485/95 against Banco

de Santander; 483/96; 1572/96 against La Caixa; 454/96 against Caja General de

Ahorros de Canarias; and 34/96; 1010/96; 2083/95; 951/96; 805/96; 702/96; 134/96;

1090/96; 408/96; 727/96; 1358/96; 1283/96; 1875/96; 1924/96. We can appreciate

several cases where the ISSUERS DON'T APPLY THE LIMITS OF AVAILABILITY

OR LIABILITY IN DIFFERENT FRAUDULENT OPERATIONS, "against the Code

of best practices of European banks refered to cards used as payment instruments, of 14

November 1990".



There are no specific claims related to this concrete point.

Is the holder provided with a right to countermand an order? (this should only

occur when the amount payable was not determined when the order was given)

Claims 1058/94 against Unicaja and 864/96. The claimants had bought a good by mail

with a VISA card. Afterwards, they changed their mind and ask the issuer, in writing,

don't to attend the charges of the retailers. The issuers didn't implement any action to

defend the clients benefits during one month and the retroactivity of the amounts

charged took place 6 months later. This is opposite to the good banking practice.


62

In the Claim 1070/88, refered to UNILATERAL CANCELLATION OF THE CREDIT

CARD, it's clear that the issuer failed to comply with the good banking practice

because, although the entity was apparently protected by the contract, its behaviour was

completely arbitrary against one client who had comply with all the obligations related

to the contract, and with no objective reason to justify the final decision. The same

object is dealed with in Claims 1140/92; 218/92; 807/93; 948/93; 841/92; 888/93;

535/93; 1494/93; 1396/93; 1301/93; 321/94; 1960/94; 1961/94; 1079/94; 1175/94;

1542/95; 181/95; 1281/95; 1280/95; 661/95; 1102/95; 2072/94; 2652/94; 2305/95;

163/96; 957/96; 610/96; 586/96; 1734/96; 2064/96; 758/96; 266/98; 566/98; 884/98;

1593/98. The issuers cancelled the credit cards with no prior notification to the holder,

and this notification is necessary to comply with the minimum level of confidence and

transparency in banking operations.

Claim 1564/89 against Banco Hispano Americano about the UNILATERAL

MODIFICATION OF ONE OF THE CONTRACTUAL CLAUSES RELATED TO

THE USE OF THE CREDIT CARD WITHOUT THE HOLDER'S CONSENT. The

claimant declared that her credit card was stolen and afterwards, some one used the EPI

for cash withdrawal in a dispenser machine but above the limit fixed initially in the

contract. The Service understood that it doesn't agree with the good banking practice

because the issuer can't modify the conditions of use of the EPI with a generic letter and

no concrete prove of the holder's consent. It is also interesting the Claim 996/90.

Claims 1672/89 against Banco de Sabadell; 2650/89 against Caja de Ahorros y Monte

de Piedad de Zaragoza, Aragón y Rioja;857/92 and 462/93 against Caja de Ahorros del

Mediterráneo; 73/96 against Banco Popular. The MODIFICATION AND

UNILATERAL ALTERATION REFERED TO THE DIARY LIMIT OF

DISPOSITION WITHOUT CREDIBLE AND AUTHENTIC HOLDER'S CONSENT

breaks the good banking practice. And the same solution is applicable to the issuer

which changes the nature of the payment (credit for debit and so on), or to the issuer

which reduces or removes the limit of credit (Claims 2318/97; 2715/97; 2497/89 and

2185/97).

Claims 1818/89 against Banco de Santander; 2192/90 against Caja de Ahorros de

Córdoba and 1242/90 against Banco de Santander. The issuer cancelled the holder's

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credit cards because there was an effect or bill not paid rested on a contractual clause

that permit cancel the cards whenever the issuer thinks it can be necessary. Anyway, the

Service said that the issuer needs to communicate and notify this fact to the holder and

this notification didn't take place, provoking legal uncertainty and lack of proper

defence from the holder point of view.

The Claims 1208/93 against Caja de Ahorros de Salamanca y Soria and 445/98, about

UNDUE COLLECTION OF FEES BY USING THE CREDIT CARDS IN ATMs

THAT BELONG TO THE ISSUER'S NET, observe another behaviour against the good

banking practice because those fees wasn't in the contractual clauses.

Claims 453/93 against Banco Central Hispano Americano; 352/94 against Caja de

Ahorros San Fernando de Sevilla and 1137/95; 2122/94; 460/98; 1920/97; 2048/98;

2344/97; 1202/98. The issuer which modify unilaterally and substantially the

contractual conditions against the holder's interest, is acting against the good banking

practice.

The Claim 1179/95 explain the situation created when a CREDIT CARD BECAME NO

OPERATIVE because of a technical problem. The claimant had several accounts and

credit cards in Barclays Bank and the concrete office of Barclays was integrated in a

new entity (Banco de Comercio). Both entities didn't want to carry about the liability of

that situation and finally the Service understood that the two of them had to respond

because they were acting against the good banking practice.


In the Memory of 1987 the Service confirmed in general terms a situation against the

good banking practice, provoked when the issuer dispatch an unsolicited credit card

only with a letter saying that if the holder doesn't express the opposite, the issuer will

start charging the corresponding fees and a new and at the moment invisible contract,

will be operating. This is not possible because the entity impose the holder an obligation

to act (send the letter to the issuer refusing the credit card) and this is an unilateral

assessment unacceptable from the legal point of view. We can see an example in Claims

953/94 against Banco de Vizcaya and 1731/94 against Caja Postal.

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⇒ Assessment of compliance / non-compliance with the Recommendation: 4

4.2.3. Notification procedure and liability of the issuer after notification

Are enough means available “at any time of the day” to enable the holder to notify


Claim 459/93 about the HOLDER WITH NO MEANS AND NO SYSTEMS TO

NOTIFY THE ISSUER, "AT ANY TIME OF THE DAY", THE LOSS OR THEFT OF

THE ELECTRÓNIC PAYMENT INSTRUMENT. The Service understands that this

situation transgress the good banking practice because the issuer wanted the holder to

notify the loss or theft in writing and only during the working hours, with no possibility

of telephone notifications.

Claim 1375/92. The Service said that the contract must include special mentions related

to the specific means to enable the holder to notify the loss or theft of the EPI and

mentioned the clause 6, point b) of the Code of Conduct on electronic payment.

On the other hand, the Claim 1335/93 against Banco de Crédito y Ahorro, about a

TECHNICAL ERROR WHICH PROVOKES THE CANCELLATION OF A CREDIT

CARD, establishes that the entity cancelled the VISA card and the mistake was caused

by the centre in charge of the traffic and examination of the different notifications. In

opinion of the Service, the issuer must give the valid and correct means to notify every

incidence and must be liable whether the system failed.



We have just analysed different cases related to this point.


Claim 31/94 against Caja de Ahorros y Monte de Piedad de Madrid, about

OPERATIONS AFTER A THEFT. The issuer couldn't prove that the different

65

dispositions were made after or before the theft and didn't bring any documental

justification of the claimed operations. The issuer has to prove those facts, not the

holder because the situation is clearly apposite to the good banking practice.


There are no specific Claims related to this point.



We have analysed several cases previously.


There are no specific Claims related to this point and we only can confirm that the

Service only has studied credit card cases.

⇒ Assessment of compliance / non compliance with the Recommendation:2



transaction?



We have seen previously that the holder is exempted to prove any operation or

disposition, and here we can analyse the Claim 1235/94, where THE SIGNATURE IN

AN INVOICE IS NOT THE AUTHORIZED SIGNATURE OF THE CREDIT CARD.

The issuer and not the holder had to prove and bring evidence related to the correct

identification of the holder and the correct signature of the purchase. And the Claim

66

1099/94 about an INVOICE WITHOUT SIGNATURE, where the Service said that the

signature is an essential requisite to prove a purchase and the holder is exempted to

prove it.




Is there any case law testifying the practical situation of holders in their

relationship with issuers?


4.3.5. Settlement of disputes

This entire chapter is about the settlement of disputes.

PRINCIPLE OF BURDEN OF PROOF

Is the principle of burden of proof reversed in favour of the consumer?

In Spanish legal system the general rules on burden of proof are established in art. 1214

of the Civil Code . According to this article the proof of the existence of an obligations

corresponds to the person who claims the satisfaction of that obligation; and the proof of

the extinction of that obligation corresponds to the person who alleges this fact.

This article is applied in the numerous Spanish resolutions that approach the topic of the

burden of proof, in general completing in an appropriate way art.7.2.e) of the

Recommendation that establishes the burden of proof on the issuer in the event of

dispute with the holder on the operations carried out with the card.

In that sense, the SAP Madrid 9-6-1998 (in the same sense that the SAP Alicante 18-1-

1993, SAP Alicante 30-1-1995) establishes very clearly that the issuer entity has the

67

duty or burden, generically imposed by art.1214 of the Civil Code, of crediting or

proving those facts or acts which are the base of its reclamation right. And,

applying this principle, in the concrete case of the resolution, the court declares

unfounded the claiming of quantity made by the issuer entity attending to the lack of

evidence or proof of extrajudicial communication of the quantities charged in the

holder's bill, and the lack of evidence of the cause of these charged quantities (if it was a

cash withdrawal, with identification of day, hour and place, or if it was the payment of

goods or services with expression of the establishment and the town where they were

acquired or provided) in spite of being the own issuer bank who has all the information.

In the same sense, the SAP Coruña 2-2-1998, in case of use of the card for cash

withdrawal in dispenser machines considers enough proof the communication of

the different records existing in the central of operations (in this case the VISA

system): the records done through the communication of the operations of the dispenser

machines are an electronic testimony that evidently is impartial, although it can be

erroneous due to the existence of some anomaly in the functioning of the system. But

what is not possible to demand is that the entity proves the correct functioning, in the

dates the cash withdrawal were done, of every dispenser machine that was used (most of

them were not in its branches), since the correct operation is the normal situation and

the anomalies the exceptional situation. And also the person who can detect the

anomalies is the holder of the card who knows the use that made of the card and who

obtains the corresponding receipts or vouchers. So the proof of quantities charges

refered to cash withdrawal in dispenser machines of VISA must be considered enough

to credit their correspondence with the reality. Regarding those charges that seem to

correspond to operations in commercial establishments, since any document voucher is

delivered, they cannot be considered proved and their claiming is rejected.

So, in general, Spanish Courts approach the topic of the burden of proof establishing the

burden of proof on the issuer in the event of dispute with the holder on the operations

carried out with the card. Nevertheless, and starting from this principle, generally

admitted by the jurisprudence, that corresponds to the issuer entity proving which were

the operations carried out by the holder of the card:

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-in the first place, it's important to remark that there are some sentences that consider

enough the certification of the debt of holder's account and the listing with the operated

movements, in the case of periodic remission by the bank entity of the movements or

extracts without claiming by the holder in the contractually established term (SAP

Alicante 2-11-1994, SAP Tarragona 2-9-1996, SAP Soria 2-9-1996, SAP Madrid 21-7-

1997, SAP Málaga 2-7-1998). In the same sense, SAP Seville 19-2-1998 considers that

the lack of objection in the term of thirty days (according to clause of the contract) of

the charges made in the holder's account and notified by remission of the extract to the

holder supposes the conformity with the indebted balance; so that this resolution

considers the certification of the debt and the delivering of copy of the extracts of

operations periodically sent to the holder are enough proof, and that they are

considered sent and received because the parts in any moment have manifested that it is

the first moment they have notice of this debt. In the same way, SAP Málaga 2-7-1998,

SAP Barcelona 7-9-1998, and SAP Las Palmas 29-9-1998, also consider that it doesn't

suppose a probatory privilege in favour of the financial entities but distribution of the

burden of proof according to the principle of the easiest proof.

-in second place, sometimes Spanish Courts consider particular circumstances. The SAP

Balearic Islands 4-2-1999 declares reasonable the claiming, without necessity of proof

of the particular operations, because the holder of the card alleges a robbery of the card

in 1991, but there's not objective evidence of that robbery, neither there's evidence or

proof, since then on and in the following years, of any claiming or objection of the

holder after receiving the corresponding extracts of the account.

5.2. Compliance with the recommendation

In the Spanish system, there are numerous resolutions that approach the topic of the

load of the test, in general completing in an appropriate way art.7.2.e) of the

Recommendation that settles down on the issuer, in the event of dispute with the holder

on the carried out operations, the burden of proof.

Assessment: 4

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Work Package 2

Contracts analysis

70

We have collected 40 contracts aprox.., In general, issuer entities have giveus the contract for the study with no problems.

We have selected 25/30 contracts to analyse their content in order to apply the check-list. There are credit/debit/diferred debit card contracts, electronic money contracts andalso phone/electronic banking contracts.

Now we are analysing the content of the selected contracts in order toassess the compliance with the Recomendation. We are ending this work(probably next Tuesday we will finish WP2).

In general, we consider there will be a medium level of complianceregarding obligations and liabilities, and a low level of complianceregarding the other groups of questions of the check list.

71

The report for WP 2 should comprise an analysis of the contracts between the

issuer and the holder of the EPI using the compliance check-list.

1. Overview of the contracts collected

1.1. Assessment of contacts with issuers

In general terms, the contacts with the different issuers of the EPI's have been

satisfactory. They provided all the information we asked for and the only problem was,

in several cases, to obtain the original contracts because the issuers didn't know exactly

which were our intentions about the information required.

Some of the issuers wanted to know why we needed all kind of contracts related to

EPI's but they didn't put any other obstacle and collaborated gladly and only one or two

visits were necessary to bring to an end our research.

In conclusion, we have to thank the different credit institutions and other concrete

entities because we could develop our research and posterior study in the best

conditions.

A) Description of the contracts collected

We have collected 37 contracts from different institutions and all kind of EPI has been

analysed because we have, at least, two contractual models about all of them.

Then we have chosen 22 concrete models and we have developed and focus our

research on them.

1. Debit cards:

• Banco Sabadell (4b Maestro and 4b Mastercard)

• La Caixa (Visa Electron)

• Banca March (4b and 4b Mastercard)

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• Sa Nostra (6000 Maestro)

2. Differed debit cards:

• El Corte Inglés (Tarjeta El Corte Inglés)

• La Caixa (Tarjeta REPSOL)

• PRYCA-CORREFOUR (Tarjeta PRYCA)

3. Credit Cards:

• La Caixa (Visa)

• Sa Nostra (Visa Classic)

• Banco Sabadell (Visa)

• Banca March (Visa)

• Cajamadrid (Visa)

4. Electronic Money Instrument:

• Banesto (Virtual Cash)

5. Company Card:

• El Corte Inglés (Tarjeta El Corte Inglés)

6. Phone Banking:

• Banca March (Telemarch)

7. Home Banking:

• La Caixa (Línea Abierta)

8. Internet Banking:

• Banesto (Internet Banesto)

• BBV (BBVNet)

• Sa Nostra (Net Sa Nostra)

9. Reloadable Instrument:

• La Ciaxa (Visa Cash)

• Cajamadrid (Visa Cash)

• La Caixa (Visa Cash REPSOL)

Total: 22 contracts.

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2. Compliance with the recommendation: apply the compliance check-list

We apply the check-list in order to assess the compliance of contracts collected in Spain

with the principles set forth in the Recommendation. There are questions include in the

check-list with no answer because they are not ruled in contracts.

2.1. Transparency of conditions for transactions



concluded?

In general, the information related to the contract is provided to the holder upon

signature of the contract because that is the moment when the holder has possibly the

first and last personal contact with the bank. On the other hand, whether the holder

wants to examine the contractual conditions before the contract is concluded, the issuer

gives him the text and there is no problem to study and analyse the general terms and

conditions.


We can find two kind of contracts or written terms: some credit institutions include all

the possible EPI’s in one contractual model and specific rules related to every single

EPI individually considered. And on the other hand, other institutions have different

contracts for debit cards, credit cards, smart cards, Internet banking and the other EPI’s.

First of all, the issuer shows the general and particular terms, in writing, of

the contract and explains to the holder the way the EPI can be used3. In the

3 The holder has to present the signed card, proving his identity and signing the corresponding invoicesrelated to the concrete operations.

74

specific case of the Internet Services and Home or Phone Banking is really

important the oral information and the sample that the issuer can procure

(we could observe this fact at the moment we performed the anonymous

on-the-spot surveys beside issuers of EPIs for the WP4, because they

offered the holder practical assistance related to the specific use of these

new banking services)

The contractual terms describe the object of the contract (it depends on the

concrete kind of EPI we have chosen) and establish certain basic rules

related to the description of the electronic instrument:

B) Regarding contracts with cards, it is clear that the EPI belongs to the

credit institution and it’s personal and not transferable.

C) The card is a way to identify the holder.

D) The holder can ask for additional cards for other people.

E) The use of the EPI means the acceptance of the contract and al the

conditions.

F) And of course, the contract express the normal period within the

holder’s account will be debited or credited, including the value date,

or, when the holder has no account with the issuer, the normal period

within she/he will be invoiced and indicates the specific system of

payment.

The contractual conditions describes the types of any charges payable by

the holder, and in particular, the charges related to the initial and annual

fees and any other charge after each transaction.

The terms also include that the instrument can be used for transactions

abroad but they only say that those transactions will comply with the law

75

in force. We could see that some contracts are not very clear in this aspect

and the holder can’t have a complete and informed idea of that kind of

operations.

The contractual terms can be changed and the credit institution can

incorporate some new conditions but the holder has to be informed and has

a period of time4 to withdraw the contract whether he/she doesn’t agree

with the new situation.

The contract express the period of validity of the EPI (in general

indefinite), and the options to renew it whether it is necessary.

Of course, the contractual clauses describe and establish the holder’s and

issuer’s respective obligations and liabilities and the necessary description

of the reasonable steps that the holder must take to keep safe the EPI.

Finally, the contractual terms include the clauses related to the submission

to a concrete court (the court where the contract has been signed) and a

generalised clause that has nothing to do with an EPI but every credit

institution includes: the possibility of transferring the personal data to other

companies and enterprises.

Is the information provided in easily understandable words and in a

readily comprehensive form?

In general, the information is provided in understandable words but we

know that the general terms (not only the terms for EPI’s) seem to be

4 The period of time depends on the concrete credit institution. 15 days in Banco Sabadell, Banca March,Cajamadrid, 30 days in Sa Nostra, or no specific period in La Caixa, for example.

76

created not to be read. Anyway, whether we think about a normal consumer

it is clear that some of the terms included are too much technical and

complicated.


One of the concrete obligations of the issuer of an EPI, included in the contracts we

have examined, is to provide to the holder a justifying or invoice of each operation. On

the other hand, we can find that some of the contracts (not all of them) have specific

mentions about the notification, once a month or simply periodically, of the complete

and total transactions effected by means of the EPI, including a clear reference enabling

the holder to identify each transaction.



We have to mention the specific cases of Internet Banking and Phone Banking because

the issuers of that kind of EPI's provide some optional information related to their

practical aspects.

In fact, we can conclude that whether a future user of those new EPI's sign the contract,

the issuer provides samples and practical software programs to show the way the EPI

works. This is not written information but it could be included in the clauses related to

the description of the EPI and its properties; it is an information provided at the moment

the holder sign the contract, gratuitously and absolutely necessary because the

consumers are not used to manage with this kind of instruments.



There is no optional information provided to the holder after each transaction.

77





Regarding obligations , in general contractual terms impose to the holder of the card the

obligation of informing to the issuer without delay after becoming aware of the loss or

theft of the card or of the means which enable it to be used. In this case, some contracts

also establish that the holder has to give to the issuer a copy of the official complaint or

report of these facts.

Some contracts also establish that the holder of the card has the obligation of taking all

necessary measures which allow him/her to have notice of the mentioned circumstances.

And some contracts also establish that since the notification of loss or theft of the card,

the issuer will take measures tending to avoid any other use of the card.


-on the part of the issuer, contractual terms ususally establish that the issuer will bear

the loss sustained in consequence of a non-authorised transaction efected by means of

the card when this transaction will be made after the notification from the holder to the

issuer.

-on the part of the holder,

a) in general for credit, debit and diferred credit card,contractual terms establish that the

holder will bear the loss sustained in consequence of the loss or theft of the card up to

the time of notification to the issuer. Contractual terms usually establish this liability of

the holder regarding non authorised transactions previous to the notification to the issuer

78

is limited to 20.000/25.000 pts.(120/150 euros), except where he/she acted fraudulenty,

with extreme negligence, or in contravention of contractual terms ruling the use of the

EPI and the obligations of the holder.

Finally,some contracts establish that if the holder has acted with extreme negligence or

fraudulently, the holder will bear the whole of the loss produced by non-authorised

transactions carried out after the notification, independently of the obligation of the

issuer of taking all measures in order to avoid any other further use of the card.

b) in case of electronic money, contractual terms usually establish that the holder will

bear the loss in consequence of the loss or theft of the card up to the totally of the

quantity pending of use, even after the notification of this facts to the issuer. In case of

theft or loss or the card, some contractual terms also establish that after the notification,

the issuer will take necessary measures in order to avoid the reloading of the card.



of the EPI)


In a generic way, contractual terms impose to the holder the obligation of taking all

reasonable measures in order to guarantee the security of the cards and the means of use

(such as the personal identification number or any other code).

Sometimes, contractual terms are more concrete and forbide to the holder writing

his/her personal identification number (or any other code) in a way easily understable

by a third person. Terms impose, in particular, the obligation of non-writing personal

identification number (or any other code) on the the card, neither on the documents

usually kept with the card.

On the part of the issuer contracts usually establish that the issuer will take all necessary

measures in the moment of issuing the personal identification number or any other code

79

and he will have the obligaton of not disclose the holder's personal identification

number or other code, except to the holder.


A.- In general, in case of credit, debit and diferred credit card,contractual terms

establish that the holder will bear the loss sustained in consequence of the loss or theft

of the card up to the time of notification to the issuer. In general, this liability is limited

to 20.000/ 25.000 pts. (120/150 euros), except where the holder acted fraudulenty, with

extreme negligence, or in contravention of contractual terms ruling the use of the EPI

and the obligations of the holder.

.

Some contracts apply this limit of liability only to those non authorised transactions

carried out during 24 hours previous to the notification to the issuer. And other contract

apply this limitation only if the notification is done during the 24 hours after to the loss

or robbery.

B.- In case of electronic money, contractual terms usually establish that the holder will

bear the loss in consequence of the loss or theft of the card up to the totally of the

quantity pending of use, even after the notification of this facts to the issuer. In case of

theft or loss or the card, some contractual terms also establish that after the notification,

the issuer will take necessary measure in order to avoid reloading of the card.

C.- In case of phone/home/electronic banking, some contracts establish that in case of

loss of the secret keys or codes, or acces to this secret keys or codes by non-authorised

persons, the holder has to notify this fact to the bank. Only two contracts establish that

the bank will be liable for non-authorised transactions carried out after the notification.

And no contract establish a limit of liability in favour of the holder.




80

On the contrary, some contractual terms establish that the terms will impose to the

holder the obligation of accepting all transactions carried with the card.


Contracts usually establish that contractual terms can be altered by the issuer, but the

issuer will notify or announce this change previously the holder to enable him/her to

withdraw if he/she chooses. The terms specify a period of cancelation. The ending of

this period without cancelacion of the contract by the holder will be considered an

acceptation of the new terms by the holder.

Contractuals terms usualy establish that the modification of rate interest and

comissions is not governed by this previous rules and it will be applied upon the date

established in the publication of such modification.








Some contracts include one, or even more, points of contact, with their corresponding

telephone number, where will be possible to comunicate the notificacion of loss or theft,

in order to make possible this notification at any time of day or night. This points of

contact are usually: any office or branch of the bank issuer, the Card Service of the

issuer or a continuos service (for example, Visa España).

81

It’s important to remark that some contracts establish the holder’s obligation of

notification but not concrete the point of contact, in particular, they don’t include

contact phone number.

We have found a contract where there’s not a 24 hours point of contact; but in this case,

the issuer (a commercial group) bears expressly the loss consequence of the loss or

robbery of the card not only after but before the notification.



As we have said, some contracts include one, or even more, points of contact, with their

corresponding telephone number, where will be possible to comunicate the notificacion

of loss or theft, in order to make possible this notification at any time of day or

night.This points of contact are usually: any office or branch of the bank issuer, the

Card Service of the issuer or a continuos service (for example, Visa España).

It’s important to remark that some contracts establish the holder’s obligation of

notification but not concrete the point of contact, in particular, they don’t include

contact phone number.


No, he is not.






82




transaction?

In general, contractual terms establish this holder’s obligation; accepting every

transaction carried out with the card and accepting the electronic records of the issuer

entity as receipt or document of proof of the existence and quantity of the transaction.

Generally contractual terms establish that the issuer will send periodically to the holder

an extract of the transactions carried out with the card during the corresponding period.

They establish a term (normally of period of 20/15/10 days) for possible claims of the

holder. If there are not claimings before the ending of the term, the extract will be

considered accepted by the holder.

Some contracs establishes that a certification of the documents of the bank issued

sometimes by the same issuer, sometimes by a public notary, will enough proof of the

debt of the holder.

In case of phone/home/electronic banking, some contracts establishes that the use of

secret keys or codes is similar to the use of the electronic signature; the issuer will keep

an internal electronic record or every transaction carried out through the service of

electronic banking and this internal record will be a mean of proof of the existence of

the transactions,





issuers?

83






The contracts examined in Spain don't include any mention related to specific and

adequate means for the settlement of disputes between a holder and an issuer. In the

Recommendation the Member States are invited to ensure that the means of settlement

of disputes are effective but we can't see the existence and regulation of any mean in the

clauses of the contracts in Spain.

On the other hand, all the contracts include a concrete clause when the holder accepts

the submission to the courts of the place where the contract has been signed. This is the

only mention included and it has nothing to do with the out-of-court procedures because

this kind of means has been absolutely forgotten by the issuers.


84

Work Package 3

Contacts with consumer panels

85

1. Description of contacts

1.1. Type of associations contacted (consumer associations, banking ombudsmen, etc.)

We have contacted with several consumers' associations to obtain information related to the claims anddifferent proceedings between holders and issuers of electronic payment instruments (EPI's). We haven’tfound specific panel consumers in Spain specifically created in the field of EPIs granted to consumers.We have selected those national consumer associations belonging to the Council of Consumers and Usersof the National Institute of Consum.

First, we are going to present and describe each particular association and after that we must analyse theconclusions about the general low degree of collaboration obtained.

AUSBANC. Asociación de usuarios bancarios (Association of banking users).

AUSBANC is a consumer association that works specially on banking area. It is one of

the most important consumer association of Spain.

OCU. Organización de consumidores y usuarios (Organisation of consumers and users)

OCU is a general consumer association that works also, but not only, in banking area. It

is one of the most important consumer association of Spain. OCU publishes an

important Journal (“Dinero y derechos”, Money and rights) where appears interesting

studies for the defense of consumers.

ASGECO. Asociación General de Consumidores y Usuarios. (General Consumers' and Users'

Association).

ASGECO wants to establish a complete system collecting the social aspects related to the formation,information and defence of consumers and users in Spain. This organisation wants to protect all theconsumers and users in general and not only those grouped in concrete Cooperatives of consumers.

UNCCUE. Unión Nacional de Cooperativas de Consumidores y Usuarios (Consumers' and

Users' National Union).

UNCUE was created in 1942 to group together and associate the Cooperatives of consumers and users, topromote and guide their different actions and collaborate with them. The Cooperatives of users areestablished to defence the interests of a group of people with similar necessities by giving them goods andservices in the best conditions of quality and price.

All the services and actions of ASGECO and UNCCUE are centralised in Madrid but the

particular consultations and claims can be presented at the concrete local association worried

about the formation and information of the consumer. ASGECO and UNCCUE represents

more than 300 different firms collecting more than 130.000 consumers and users and work in

86

national and international forums and meetings related to the defence and protection of

consumers and users.

UCE. Unión de Consumidores de España (Spanish Consumers' Union).

UCE is a democratic and independent association, declared as a public benefit organisation, that

involves different entities and small consumers' associations and has more than 60 offices all

around Spain. It was created in 1985 and now is recognised as a representative of the interests of

Spanish consumers and users.

UCE is open to everybody and its main objective is to defend the consumers' and users' interests

and demand the complete application of the existing legislation and imposition of sanctions

when a problem or conflict arises.

UCE has concrete instruments to develop and fulfil its objectives: participation in consultative

and representative bodies at European, national, autonomic and local level with important

practical manifestations (Consejo de Consumidores y Usuarios); to exercise the right of

preliminary hearing in the process of elaboration of acts and another kind of legislation related

to the consumers' protection; the right of public denunciation of the facts about consumers and

users; to collaborate with other consumers' entities and adoption of specific bodies to solve the

disputes; and participation in the Foundation CIUDADANO, with a Journal that provides

complete information and comparative analysis between different products and services

provided to the consumers and users.

CECU. Confederación de Consumidores y Usuarios (Consumers' and Users' Confederation).

CECU also involves different associations around the country protecting the legal and good

consumers' and users' interests.

HISPACOOP. Confederación Española de Cooperativas de Consumidores y Usuarios

(Spanish Confederation of Consumer and User Cooperatives).

HISPACOOP is the body in charge of representing the Spanish consumer cooperatives before

the various national or international forums and institutions. HISPACOOP plays a double role

as both a co-operative business organisation and a co-operative consumer organisation.

HISPACOOP is formed by the Federación de Cooperativas de Consumo de Andalucía , the

Federació de Cooperatives de Consumidors i Usuaris de Catalunya, the Federación de

Cooperativas de Consumo de Euskadi, the Federación de Cooperativas de Consumo de la

Comunidad Valenciana and the Federación de Cooperativas Eléctricas de la Comunidad

87

Valenciana. Some cooperatives located in areas where there is no federation are also members

of HISPACOOP.

Objectives:

1. To represent and defend the interests of consumer co-operatives. 2. To defend consumers and

provide them with information and training, and to collaborate with other consumer

organisations. 3. To improve business competitiveness in the co-operatives, particularly through

training programmes. 4. To promote and develop the values and principles of consumer co-

operatives. 5. To support the concentration of resources and business collaboration at national

and European levels.

UNAE. Federación Unión Cívica de Consumidores y Amas del hogar de España (Civic Union

Federation of consumers and housewives of Spain).

This Federation represents the interests of consumers and, in a specially manner, housewifes. No muchinformation about this federation has been provided because the web page was no available on Net.

CEACCU. Confederación Española de Organizaciones de Amas de casa, Consumidores y

Usuarios (Spanish Confederation of Housewifes Organizations, Consumers and Users).

CEACCU is the spanish consumers organisation with the biggest number of associates

(500.000), which are integrated in the 54 confederated organisations presented in each

Autonomical region.

CEACCU is a result of the successive transformations of the first consumers organisations in

Spain. Constituted in Madrid (9 of October, 1968.). From the beginning, the Confederation

have been working on the defence and training consumers and housewives.

The contacts with these associations began in May with phone calls, e-mails, faxes and even

direct contacts in the address of the association. The contacts with those associations were

aimed at collecting relevant information (reports, studies, surveys, etc.) on the relation between

issuers and holders of EPIs and also at collecting information on the complaints received by

consumer associations related to the relation between issuers and holders of EPIs. In particular

we have asked for next information to every association contacted:

-documents, reports, studies on electronic payment instruments (credit cards, debits

cards, electronic money instruments, etc.), on the relation between issuers and holders of these

EPIs and the position of consumers using these EPIs. We have also asked for documents,

88

reports, studies on phone and electronic banking created by every consumer association or by

other entities (other associations, public or private entities, etc).

-legislative documents on electronic payment instruments, and specially, codes of good

practice applied by EPIs issuers.

-cases of complaints received by consumer associations and judicial and extrajudicial

claimings of consumers associations acting on behalf of consumers related to electronic

payment instruments (credit cards, debits cards, electronic money instruments, etc.), specially

regarding the relation between issuers and holders of these EPIs and also related to phone and

electronic banking, Number and content of complaints, judicial and extrajudicial claimings.

-general statistical data on claimings related to EPIs (judicial claimings, extrajudicial

claimings, etc...)

5.1. Contacts with specific consumer panels

There are not concrete consumer panels related to Electronic Payment Instruments in Spain and

there are not special means to solve the disputes about it.

6. Analysis of information collected

2.1. From consumer associations and banking ombudsmen

First of all, we have to mention that the collaboration, participation and the general help

provided by the consumers' associations has been rather scarce and accordingly, we have found

some difficulties to find the documentation with the data and the information that should be

analysed.

As we have said before the contacts with consumers associations selected began in general in May withphone calls, e-mails, faxes and even direct contacts in the address of the association. In spite of ourefforts, the results of contacs have not been very positive. In some cases, consumers associations doesn’twork on electronic payment instruments; in other cases, they have sent us to other associations that worksspecially with EPIs. In general, it has been difficult to get the colaboration of consumers’ associations: infact, by the moment we have collected information only of two of the contacted associations.Furthermore, in general the information collected is not all the information we asked for, and thisinformation has been provided with delay (an example, information we asked for at the end of April hasbeen received in the month of july, and only after a lot of phone calls, faxes, e-mails, etc).

ASSOCIATIONS CONTACTED WITHOUT INFORMATION COLLECTED:

ASGECO/UNCCUE

The Services are centralised in Madrid, Plaza Navafría, n. 3. Phone Number: 906301267. Mail:

[email protected]. We contacted three times in June 13, 14 and 20, but we couldn't get

the information was required because the collaboration was not important.

89

UCE ESPAÑA.

Address: Atocha, 26, 3º Izquierda. Phone Number: 913691287/913691412. Mail: [email protected].

We had the same problem of lack of collaboration during the contacts we had in June 15 and 20.

CECU.

Address: Cava Baja, 30, 28005 Madrid. Phone Number: 913640276/913640522. Mail:

[email protected]. We contact twice but the information was not provided.

OMIC.

This is a local organisation in Palma de Mallorca and we would like to focus onthe absolute lack of collaboration of the staff.

HISPACOOPWe took contact with the association in June, 3 of 2000 by electronic mail . They response on 3

of July of 2000 that they do not work on electronic payments subjects. In that way, if they have

notice of a claim on this subject, it is automatically sent to those associations which are

specialist on banking contracts.

Name of the contacted person : Teresa Udina

e- mail: [email protected]

UNAE

The contact with the federation took place in June of 2000 by telephone. As it is a federation

especially about housewifes, hardly ever a claim about bank contracts is presented. If a claim

about this subject is presented, they send it automatically to those associations which are

specialist on banking contracts.

Name of the contacted person: Ana María Moreno

Telephone number:

CEACCU

The contact with the federation took place in June, firstly by e-mail and, because of there were

no answer, by telephone. During four weeks, we try to obtain the information about contracts

banks claims, but there were no response.

90

Telephone number: 91- 4470481

ASSOCIATIONS CONTACTED WITH INFORMATION COLLECTED:

OCUThe contact with the OCU took place on May, firstly by phone and also by e-mail. During some

weeks, we try to obtain the information and finally we have got it in July. OCU is one of the few

associations that sent us part of the information we asked for.

Persons contacted: Juan del Real, Director y Antonino Joya, Responsible of External Relations. Tel. 91300 00 45. C/ Milán 38. 28043 Madrid.

Información collected:

-Some articles on electronic payment instruments published in the Journal of the Association called“Dinero y derechos” (Money and rights) (Journal for the information and defense of consumer):

--“Dinero y derechos” (Money and rights) nº 56 January/February 2000, pages. 7 to 9:“Defenderse ante los abusos de los bancos”: cómo y dónde reclamar en caso de problemas con el banco”(Defense against the abuses of banks: how and where claiming in case of problems with the banks); inthis article two cases are analysed: one of loss of a card and other of cancelation of the card by the bank.

--“Dinero y derechos” (Money and rights) nº 55 November/December 1999, pages 9 to 12:“Tarjetas comerciales” (Commercial cards): study of some commercial cards, advantages andinconvenients.

--“Dinero y derechos” (Money and rights) nº 47 June 1998, pages 24 to 28: “Cuentas y tarjetas”(Accounts and cards): study of different kinds of cards existing in the market (with commissions and ratesapplicable) and the banking accounts linked to these cards in order to allow the consumer the election ofthe more convenient card.

--“Dinero y derechos” (Money and rights) nº 42 August 1997, page 38: “Tarjetas monedero”(Electronic money): explanation of use of electronic money, and analysis of advantages andinconvenients of this new kind of electronic payment instrument.

--“Dinero y derechos” (Money and rights) nº 41 June 1997, page 2: “Tarjetas de fidelización declientes” (Fidelity cards): analysis of different fidelity cards existing in the market, advantages andinconvenients.

--“Dinero y derechos” (Money and rights) nº 36 August 1996, pages 18 to 21: “Tarjetas decliente” (Customer cards): analysis of different fidelity cards existing in the market, advantages andinconvenients.

91

--“Dinero y derechos” (Money and rights) nº 24 August 1994, pages 28 to 31: “El banco porteléfono” (Phone banking): analysis of different phone bankings services existing in the market,advantages and inconvenients.

- Number of claimings received by OCU related to banking cards: in 1999 OCU has received

613 claimings on cards (the total amount of claimings received by OCU in 1999 was 11.348).

AUSBANCThe contact with AUSBANC took place at the end of April by phone. During some weeks, we

tried to obtain the information and finally we got it in July. AUSBANC is one of the few

associations that sent us part of the information we asked for.

Persons contacted: Mª Teresa Rivero and Montserrat Suárez, Legal assessors of AUSBANC. Tel.: 91 54161 61

Information collected:

-Internal report of legal assessors of Ausbanc on bankingd cards: content: I.- Legislation. II.- Charactersof banking cards. A) Use B) Contract of issuing of banking cards: form and content. C) Liability. D)Rates of interest and comissions.

-Some judicial resolutions on electronic cards obtained refered to consumers defended by legal

assessors of AUSBANC:

--Sentence of July 1, 1999 of the Provincial Court of Toledo: case of loss of the

card with cash withdrawal in a dispenser machine: non existence of negligence of the holder of

the card.

-- Sentence November 8, 1999 of the Judge nº 20 of Madrid: case of non

authorised used of a card after the card was blocked in the dispenser machine: non existence of

negligence of the holder of the card.

2.2. From specific consumer panels

There are not concrete consumer panels related to Electronic Payment Instruments in Spain and there arenot special means to solve the disputes about it.


We try to apply the check-list in order to assess the compliance of information collected

in Spain among association consumers with the principles set forth in the

92

Recommendation. Anyway, most questions are not answered because, as we have

explained before, we have collected information only from two consumer associations.

2.3.1. Transparency of conditions for transactions

What kind of information is provided to the holder before the contract is concluded?



comprehensive form?

AUSBANC remarks that the contractual terms that rule the relation issuer-holder of the

card must be written and they must be easily understable.


What kind of optional information is provided to the holder in the contractual conditions?

Is this information provided gratuitously?

What kind of optional information is provided to the holder after each transaction? Is this

information provided gratuitously?

Assessment of compliance / non compliance with the Recommendation: Attending to the

lack of information we consider an assesment is not possible.




Regarding obligations, AUSBANC relates that in general contractual terms impose to

the holder of the card the obligation of informing to the issuer without delay after

becoming aware of the loss or theft of the card or of the means which enable it to be

used. In this case, some contracts also establish that the holder has to give to the issuer a

copy of the official complaint or report of these facts.

93


-on the part of the issuer, AUSBANC relates that contractual terms usually establish that

the issuer will bear the loss sustained in consequence of a non-authorised transactions

efected by means of the card when this transaction will be made after the notification

from the holder to the issuer.

-on the part of the holder,

a) AUSBANC relates that in general for credit, debit and diferred credit card,

contractual terms establish that the holder will bear the loss sustained in consequence of

the loss or theft of the card up to the time of notification to the issuer. Contractual terms

usually establish this liability of the holder regarding non authorised transactions

previous to the notification to the issuer is limited to 20.000/25.000 pts.(120/150 euros),

except where he/she acted fraudulenty, with extreme negligence, or in contravention of

contractual terms ruling the use of the EPI and the obligations of the holder.

Anyway, AUSBANC denounces that in practice issuer entities exonerate themselves of

liability alleging the negligence of the holder in the custody of the card, producing the

effect of reverse of the burden of the proof.

b) in case of electronic money, OCU remarks that contractual terms usually establish

that the holder will bear the loss in consequence of the loss or theft of the card up to the

totally of the quantity pending of use, even after the notification of this facts to the

issuer.



of the EPI)


AUSBANC relates that in general contractual terms forbide to the holder writing his/her

personal identification number (or any other code) in a way easily understable by a third

94

person. Terms impose, in particular, the obligation of non-writing personal

identification number (or any other code) on the the card, neither on the documents

usually kept with the card.

AUSBANC remarks that the personal identification number (PIN) only proves that the

person who uses the card knows this number, but it does not prove that this person is the

holder of the card. Acordingly, AUSBANC concludes that the PIN is not a mean of

identification of the holder of the card, question specially important in case of non

authorised uses of the EPI.


A.- In general, in case of credit, debit and diferred credit card, contractual terms

establish that the holder will bear the loss sustained in consequence of the loss or theft

of the card up to the time of notification to the issuer. In general, this liability is limited

to 20.000/ 25.000 pts. (120/150 euros), except where the holder acted fraudulenty, with

extreme negligence, or in contravention of contractual terms ruling the use of the EPI

and the obligations of the holder. Anyway, OCU has detected some contracts (especially

refered to commercial cards) that not include any limit of liability.

.

B.- In case of electronic money, OCU remarks that contractual terms usually establish

that the holder will bear the loss in consequence of the loss or theft of the card up to the

totally of the quantity pending of use, even after the notification of this facts to the

issuer.

C.- In case of phone/home/electronic banking, OCU remarks that usually contracts do

not establish a limit of liability in favour of the holder in case of loss of the secret keys

or codes, or acces to this secret keys or codes by non-authorised persons.




95



AUSBANC denounces the practices of some entities of issuing unsolicited electronic

payment instruments sending the card to the holder’s address, and even, in some cases,

charging a commission in the holder’s account.










No, he is not. And attending to this lack of proof OCU recommends to the holders

sending also a written notification to the issuer confirming the notificacion of loss or

theft.




The Sentence of July 1, 1999 of the Provincial Court of Toledo is a judicial resolution on electronic cardsrefered to consumers defended by legal assessors of AUSBANC: in a case of loss of a card with cashwithdrawal in a dispenser machine during the 24 hours previous to the notification, the issuer considers

96

liable to the holder alleging a negligent conduct that avoids applying the limit of liability established inthe contract: the Court establishes that there is not negligence of the card’s holder because the PIN wasnot written in the card; and there is not negligence when the holder has the same PIN for all his cards andthis PIN is a date that the holder can remember in a easily way.






transaction?





issuers?







97





OCU provides a model of claiming letter that can be use to claim against the issuer

entity or the Defendant of client.


out-of-court?




98

Work Package 4

Anonymous on-the-spot surveys

99

1. Tables:

1.1 Tables for each issuer survey

1) Information on the survey Survey No. 1date (if applicable, mention the differentcontacts with the issuer)

1.06.2000 and 2.06.2000

issuer (status, address, etc.)EL CORTE INGLÉS

EPI concerned Differed debit card/ Company card

2) Context of the demandholder already known by the issuer: the holderis already client and asks for a new EPI

NO

or, new relationship between the issuer and theholder

YES

3) General information required by the issuerpersonal status? YES

Gross salary? YES

Kind of personal information required? Other incomes; employment; birthday

Other information? Your bank account ; bank address

4) Information spontaneously provided by theissuer before conclusion of the contractkind of information provided The king of differed payment

format (medium) in which the information isprovided

Not written information

time the information is provided 5 minutes

5) Information provided by the issuer beforeconclusion of the contract as a response to aspecific request from the holder

kind of information requested by the holderWhy do they have to know our salary,incomes and status?

kind of information provided (+ mention of theinformation not provided by the issuer)

They said it is a necessary condition to get thecard



100

6) Information provided by the issuersubsequent to a transactionwas information provided to the holder on thetransactions carried out using the EPI?

YES

what kind of information?Price, the product bought and the date

format in which the information is provided(writing/electronic)

Electronic

time the information is provided (how longafter the transaction?)

Immediately and some days after at home

was the information provided in a readilycomprehensive form?

Yes

were there any references to enable the holderto identify the transaction?

Yes

is the amount of the transaction stated? Yes

are any fees and charges listed? Yes

is the rate of exchange for converting foreigncurrency provided?

No

for electronic money instruments: is there apossibility to check the last 5 transactions?

/

7) In case of loss or theft of the EPIprocedure to be followed by the holder tonotify the issuer

You must phone while the Corte Inglés isopen

is the procedure easily accessible? Yes

is there a means for the holder to prove he/shehas notified the issuer? (in case of phonenotification)

no

101


2.06.2000

issuer (status, address, etc.)BANCO DE SABADELL

EPI concerned Debit Card (Maestro)


NO

or, new relationship between the issuer andthe holder

YES

3) General information required by theissuerpersonal status? YES

Gross salary? NO

Kind of personal information required? Employment or job

Other information? To open an account

4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The rate of interest; the charges and cost of

the card; the way to use the cardformat (medium) in which the information isprovided

Written and oral information

time the information is provided 1 hour, because I opened an account and I gotdebit card and internet banking contracts


kind of information requested by the holderThe charges in ATM´S and the difficulties toobtain money with Master Card

kind of information provided (+ mention ofthe information not provided by the issuer)

It is possible to get money without charges


oral

102


Yes

what kind of information?The concrete operation, description of theobject or service, price and date.


Writing


15-20 days by request


Yes


Yes




/


/


24 h phone



The phone called is recorded

103

1) Information on the survey Survey No.3date (if applicable, mention the differentcontacts with the issuer)

2.06.2000


EPI concerned PHONE BANKING


NO


YES


Gross salary? NO

Kind of personal information required? JOB

Other information? You must open an account

4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The way the system works and a virtual

sample or showing about internet bankingformat (medium) in which the information isprovided

Written and practice sample in the Internet

time the information is provided 1 hour: open the account, debit card andInternet and phone banking


kind of information requested by the holderHow to provide a transaction; how to operatein the stock exchange


Every doubt was solved


Practice sample in the Internet

104


Yes

what kind of information?The concrete operation


Writing


Immediately by request


Yes


Yes

is the amount of the transaction stated? yes

are any fees and charges listed? yes


/


/


By phone

is the procedure easily accessible? yes


The phone call is recorded

105


19.05.2000

issuer (status, address, etc.)BANCA MARCHC/ Ausias March. Palma

EPI concerned DEBIT CARD (MASTERCARD)


YES


NO

3) General information required by theissuerpersonal status? NO

Gross salary? NO

Kind of personal information required? They already have information

Other information? Job, new job? New address?

4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The king of Debit Card; the conditions;

charges; interestsformat (medium) in which the information isprovided

Oral information



kind of information requested by the holderThe charges in ATM´S; the places to buy in;the countries...


All the information was provided


Oral information

106


Yes

what kind of information?Service, price and data


Writing


15-20 days after the transaction


Yes


yes




/


/


phoning




107


19.05.2000

issuer (status, address, etc.)BANCA MARCHC/ Ausias March. Palma

EPI concerned PHONE BANKING (TELEMARCH)


YES


NO

3) General information required by theissuerpersonal status? No

Gross salary? No

Kind of personal information required? They already have information

Other information? New information

4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The way it works; PIN and explanation of

special content of the Cardformat (medium) in which the information isprovided

Oral



kind of information requested by the holderWhat the numbers in the Card are for? Coulwe make transation?


All the information was provided


Oral and practical sample

108


Yes

what kind of information?The product or service, data and price


Writing


15 days after the transaction


Yes


Yes




/


/


Phoning

is the procedure easily accessible? YES


PHONE CALL IS RECORDED

109

1) Information on the survey Survey No.6date (if applicable, mention the differentcontacts with the issuer)

2.06.2000


EPI concerned INTERNET BANKING


NO


YES


Gross salary? NO

Kind of personal information required? JOB


4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The way the system works and a virtual

sample or showing about internet bankingformat (medium) in which the information isprovided

Written and practice sample in the Internet

time the information is provided 1 hour: open the account, debit card andInternet and phone banking


kind of information requested by the holderHow to provide a transaction; how to operatein the stock exchange




Practice sample in the Internet

110


Yes

what kind of information?The concrete operation


Writing


Immediately by request


Yes


Yes




/


/


By phone




111


15-06-2000

issuer (status, address, etc.)La CaixaPaseo del Mar (Palmanova)

EPI concerned Company card/CREDIT CARD


YES

or, new relationship between the issuer and theholder

NO

3) General information required by the issuerpersonal status? YES

Gross salary? NO

Kind of personal information required? NO

Other information? NO

4) Information spontaneously provided by theissuer before conclusion of the contractkind of information provided REPRODUCTION OF THE CLAUSES





kind of information requested by the holderLIABILITY, ADVANTAGES, LOSS

kind of information provided (+ mention of theinformation not provided by the issuer)

ALL THE INFORMATION



112


YES

what kind of information?THE PRICE, THE PRODUCT BOUGHT,AND DATE


Electronic


Immediately an some days after at home


Yes


Yes




/


/


You must phone



no

113


19-06-2000

issuer (status, address, etc.)BANCO BILBAO VIZCAYAARGENTARIA

EPI concerned Phone banking/Internet banking


NO


YES


Gross salary? NO

Kind of personal information required? Job


4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The advantages of a Blue Young Card

because of my age.format (medium) in which the information isprovided

Oral



kind of information requested by the holderThe quota I must pay




By phone

114


what kind of information?format in which the information is provided(writing/electronic)time the information is provided (how longafter the transaction?)was the information provided in a readilycomprehensive form?were there any references to enable the holderto identify the transaction?is the amount of the transaction stated?

are any fees and charges listed?

is the rate of exchange for converting foreigncurrency provided?for electronic money instruments: is there apossibility to check the last 5 transactions?7) In case of loss or theft of the EPIprocedure to be followed by the holder tonotify the issuer

Phoning



no

115


20-06-2000

issuer (status, address, etc.)BANESTO

EPI concerned Virtual Cash


NO


YES


Gross salary? NOT

Kind of personal information required? D.N.I or passport

Other information? You must open an account in Banesto

4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The way the system works


Oral information



kind of information requested by the holderThe minimun salary possible to deposit in theaccount




Oral (no written information)

116





By a phone call



no

117


19-06-2000

issuer (status, address, etc.)BANESTO

EPI concerned Internet Banking


NO


YES


Gross salary? NOT

Kind of personal information required? D.N.I


4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided The way the system works


Oral information



kind of information requested by the holderIf they could show me how does it work




Oral and with the computer

118





Phone call



no

119


4-05-2000

issuer (status, address, etc.)PRYCA

EPI concerned CREDIT/DEBIT/DIFFERED CREDITCARD

2) Context of the demandholder already known by the issuer: the holderis already client and asks for a new EPIor, new relationship between the issuer andthe holder

New relationship


Gross salary? YES

Kind of personal information required? Address, etc

Other information?

4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided Use of the card


Oral



kind of information requested by the holderCancellation of the card


Telephone number for the cancellation


Written and oral

120


Yes

what kind of information?Price , product bought and date


Electronic


Immediately and some days after, at home


Yes


Yes




/


/


Phoning



no

121


27-11-1998

issuer (status, address, etc.)LA CAIXA

EPI concerned CREDIT CARD


HOLDER ALREADY KNOWN



Gross salary? YES

Kind of personal information required? /


4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided FUNCTIONS OF THE CARD


ORAL

time the information is provided 2 MINUTES


kind of information requested by the holderCHARGES AND


CHARGES AND


ORAL

122


Yes

what kind of information?Details of the transaction


Writing


Aprox, 5 days after the ending of every period


Yes


Yes


are any fees and charges listed? No


No

for electronic money instruments: is there apossibility to check the last 5 transactions?7) In case of loss or theft of the EPIprocedure to be followed by the holder tonotify the issuer

Phoning to the Bank (branches or cardservice)



no

123


Different contacts during June 2000Date of signing of contract: 14-06-2000

issuer (status, address, etc.)SA NOSTRA

EPI concerned SA NOSTRA NET (INTRANET BANKING)

holder already known by the issuer: the holderis already client and asks for a new EPI

YES


NO


Gross salary? NO



4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided Explanation of the performing of the system


Oral



kind of information requested by the holderSpecial questions about the system




oral

124





Phone call

is the procedure easily accessible? No (they don’t give to holder the number)


no

125

.1) Information on the survey

Survey No. 14

date (if applicable, mention the differentcontacts with the issuer)

Contacts began at June

issuer (status, address, etc.)LA CAIXA

EPI concerned ELECTRONIC INSTRUMENT


YES


NO


Gross salary? NO



4) Information spontaneously provided bythe issuer before conclusion of the contractkind of information provided USE OF THE CARD


ORAL

time the information is provided 2 MINUTES


kind of information requested by the holderLiability in case of loos of the EPI/ reloadingof the Card




oral

126





Phone call

is the procedure easily accessible? No


No

127

1.2 Table for each holder survey

NUMBER OF SURVERYS: 15

Informationabout you

student officeworker

manualworker

professional

other

1. What isyour

occupation?

2 9 4

under 18 18-25 26-40 41-55 56-70 over 702. How old

are you?4 9 1

Informationabout your

EPI

3. What kindof EPI is it?

answer

Debit card 6Deferred

debit cardCredit card 5

Company/store card

2

Phonebankingaccount

1

HomebankingaccountInternetbankingaccount

1

ReloadableinstrumentElectronic

tokens

Obtainingyour EPI

yes no

5. Has the 3 12

128

issuer eversent you a

new EPIwhich you

had notrequested?

6. If yes, wereyou charged

for it?

0

7. Did youcomplain tothe issuer?

3

8. If youcomplained,

what was theresult?

Theycancelledthe card

Safety ofyour EPI

Yes No

9. Have yougiven your

personalidentification

number

6 9

(or othercode used foryour EPI) to

anyone?

Remembered

Recordedin

Writtenon card

Writtenon card

Writtenand kept

Recorded on

only disguisedform

andcarriedwith

separatefromcard

yourcompute

rcard

10. Is thatnumber or

coderecorded?

15

(tick all boxeswhich apply)

129

Reportingloss or theft

of the EPI

Yes No Don'tknow

11. Has theissuer told

you what todo

13 2

to notify lossor theft?

12. Has theissuer given

you clearinformation

about

9 4

what to do ifyour EPI is

lost orstolen?

13. Did theissuer

provide ameans of

identifyingyourself whenreporting loss

or theft?

15

(e.g. a codeword)

Yes No Never lostor stolen

14. If yourEPI has beenlost or stolen,

11

did you notifythis withoutany delay to

the issueras soon asyou were

aware of theproblem?

4

130

15. Did theissuer try to

argue thatyou were

responsiblefor the loss or

theft, andthus liable for

all theunauthorisedtransactions?

4

16. Whatamount was

charged toyour

account forunauthorisedtransactions?

No one

17. Howmuch were

you chargedfor

nothing

areplacement

EPI?

Informationfrom issuer:what kind ofinformation

do youreceive after

your EPItransactions

and when?

pleasetick allboxeswhichapply

Immediately

Weekly Monthly 4 times ayear

Annually

131

18. On-screenstatement

3

19. Printedstatement

1 11

20.Verbal/record

ed statement

21. Other(please give

details)

Electronicmoney

instrument

No Yes, usingthe

Yes, usingan ATM

Yes, using Other(please

giveinstrumen

ta

computerdetails)

22. Forelectronic

moneyinstruments

only:can you check

the last 5transactions?

1

Study on the implementation of Recommendation 97/489/EC 133

2. Complete compliance check-list

2.1 Transparency for conditions for transactions

According to the information collected in the surveys:

1) What kind of information is provided to the holder before the contract is concluded?

We analyze both information spontaneously provided by the issuer or as a response to aspecific request from the holder.

According to the 3 and 4 of the Recommendation, the issuer must communicate to theholder the contractual terms and conditions governing the issue and use of the electronicpayment instrument.

In that way, different information was provided in the surveys, both spontaneously and asa response to a specific request from the holder such as:

1) The kind of different payments. The holder requested why do they have to know oursalary incomes or status to concern the EPI. They said that it is a necessary conditionto get the Card.

2) The rate of interest; the charges and cost of the card; the way to use the card. Theholder requested about the charges and the difficulties to obtain money with“MAESTRO CARD”. The response was that it is possible to get money withoutcharges whether the ATM is 4B. “MAESTRO CARD” is less complete thanMasterCard.

3) How the system works and a virtual sample or showing about Internet Banking wasprovided. The holder asked how to provide a transaction and how to operate in thestock exchange. The issuer solved every doubt.

4) The kind of debit cards, the conditions of the concerned card and charges, interests,etc. The holder request about the charges in ATM´S, the places and countries to buyin, etc. Every doubt was solved.

5) Information spontaneously provided by the issuer were the way it works the PIN andthe special content of the card. The holder requested what the numbers in the card arefor and if it is possible to make a transaction. All the information was provided.

6) A reproduction of the clauses were given to the holder. The holder requested aboutliability, advantages and loss of the card and every doubt was solved.

7) They informed about the way the system works and the advantages of a “BLUEYOUNG CARD” because of the age. The holder requested about the quota that mustbe paid and every doubt was solved.

8) They explained everything about how the system works. The holder wanted to know ifit was necessary a minimum salary to deposit into the account. Every doubt wassolved.

9) In the case of Internet Banking the information was satisfactorily provide becausethey explain to the holder how the system works and all the information was availableon the Net in a readily comprehensive form.


10) The issuer PRYCA provided the information about the use of the card. The holderasked about how to cancel the card and the issuer provided a telephone number for apossible cancellation.

11) The function of the card was provided to the holder. He asked about the charges andthe issuer solved rates and every doubt.

12) The system performing was explained. The holder requested about details aboutInternet banking and every doubt was solved.

13) The issuer provided information about the use of the electronic instrument. Holderwanted to know about liability in case of loose or theft of the EPI and reloading of theEPI. Every doubt was solved.

Article 3.3 establishes some requirements that shall, at least, be fulfilled. Some of them, suchas a description of the electronic payment instrument, seems to be fulfilled by the issuer. Butother requirements are not mentioned spontaneously and the holder must to request aboutthem.

2) What kind of information is provided to the holder upon signature of the contract?

The information provided to the holder before the contract was concluded could also beincluded in this paragraph.

3) Is the information provided in easily understandable words and in a readily comprehensible form?

According to the article 3.2 of the Recommendation: "the terms are set out in writing,including where appropriate by electronic means, in easily understandable words and in areadily comprehensive form [...]".

The survey show that in the most cases, this requirement is not fulfilled because not alwaysthe terms are set out in writing.Oral information is usual and the time the information is provided is around 5 or 15 minutes.Just in several cases, written and oral was provided in about 1 hour because the holder had toopen an account and after that, he got debit card and Internet banking contracts.In the case of Internet banking and phone banking, the information was provided in a writtenway and by a practice sample in the Internet.

4) What kind of information is provided to the holder after each transaction?

According to the surveys of issuers, the information subsequent to a transaction (details of thetransaction) was provided to the holder in writing form and in a readily comprehensive form.The time the information was provided was approximately, 5 days after the ending of everyperiod.There were references to enable the holder to identify the transaction and the amount of thetransaction was stated.No fees and charges were listed and the rate of exchange for converting foreign currency wasnot provided.


According to the surveys of holders, the periods of the holders used to receive the informationabout their transactions was monthly in 11 cases (from 15surveys) and printed statement wasthe usual way to receive that information.In one case, the holder receive the information weekly and it was printed statement.Just in 3 cases, the information was received inmediatly and on-screen statement and only if itwas by request of the holder.

The information collected on surveys seems to fulfil the requirements laid down in article 4of the Recommendation.

5) What kind of optional information is provided to the holder in the contractualconditions? Is this information provided gratuitously?

No available information on surveys.

6) What kind of optional information is provided to the holder after each transaction? Isthis information provided gratuitously?

No available information on surveys.

⇒ Assessment of compliance / non compliance with the Recommendation: 4

2.2 Obligations and liabilities of the parties to a contract

1) What are the obligations and liabilities of both parties if the EPI is lost or stolen?

- Obligations/liabilities of the issuer (article 7 and 8 of the Recommendation)

According to the surveys, the issuer told to the holder in the most cases the way to notify lossor theft. But the information was no absolutitly clear in several cases. Phoning to the bankwas the procedure to be followed by the holder to notify the issuer in case of loss of theft ofthe EPI.Although the procedure was easily accessible, there was no means for the holder to prove thathe/she notified the issuer, in case of phone notification.The issuer provide a means of identifying the holder when reporting loss or theft in no

one time.

- Obligations/liabilities of the holder (article 5 and 6 of the Recommendation)

In 4 cases of the surveys, the holder had lost or stolen the EPI, but no one amount wascharge to his account of unauthorised transactions.

All of them notify this with any delay to the issuer as soon as they were aware of the problem(according to the article 5. B).In no one cases, the issuer try to argue that the holder were responsible for the loss or theft,and thus liable for all the unauthorised transactions.The charge for the replacement EPI were nothing for the holders.


2) Do issuers comply with the obligation to provide information on the reciprocalobligations and liabilities before the contract is concluded? (or well before the issueof the EPI)

No available information on surveys

3) What precautions do the holders take (or are supposed to take) to keep their EPIsafe?

In 9 cases from 15 surveys, the holder have never given his personal identification number (orother code used for the EPI ) to anyone. In 6 cases they did it.

The number or code was recorded remembered only in each cases. In that way no one has thenumber recorded written on card, or written on card and carried with card, or recorded in thecomputer, etc

In that way, information collected is fulfilling with the requirements on article 5.a) and 5.b)

4) What is the amount of the holder´s liability before notification?

Information no available on surveys

5) Is the principle of exempting a holder from liability (article 6-3) where the EPI isused without physical presentation or electronic identification applied in practice?

This information is not available on surveys but, in case of loss or theft in no one case, theissuer try to argue that the holder were responsible for the loss or theft, and thus liable for allthe unauthorised transactions.

6) Is the holder provided with a right to countermand an order?


7) What happen when the issuer alter the terms of the contract?


8) Does the issuer comply with the obligation not to dispatch an unsolicited EPI?According to the article 7.2.b), the issuer has the obligation of not dispaching an unsolicitedelectronic payment instrument, except where it is a replacement for an electronic paymentinstrument already held by the holder.

In 12 cases (from 15) , the issuer never send to the holders a new EPI which they had notrequested. But in 3 cases, the issuer did it. In no one case of them, the holder were chargedfor it. When they complain to the issuer, the result was that they cancelled the card.




1) Are enough means available "at any time of the day" to enable the holder to notifythe loss or theft of the EPI?

Phoning to the bank was the procedure to be followed by the holder to notify the issuer incase of loss of theft of the EPI. It is supposed that phone is available “at any time of the day”to enable the holder to notify it.

2) Is the notification procedure easy to follow for the holder? is sufficient informationprovide to the holder as to the functioning of the procedure?

The procedure was easily accessible in case of phone notification but, issuer provide a meansof identifying the holder when reporting loss or theft in no one time.

Not always sufficient information was provided to the holder as to the functioning of theprocedure.

3) Is the holder provided with a mean to prove his notification?

There was no mean for the holder to prove that he/she notified the issuer, in case of phonenotification.

4) Is the issuer empowered with sufficient technical means to stop the use of the EPI?

Information not available on surveys.

5) Are there cases where disputes arise between issuers and holders for reason of non-compliance with the reciprocal obligations in case of loss or theft of the EPI?

Information not available on surveys

6) What EPI/payment system appear the safest for the holder?

Information not available on surveys



1) What does the contract say about the burden of proof in case of dispute about atransaction?


Not available on surveys

2) Is the holder exempted from bringing any proof if he disputes a transaction?


3) In relation to the contractual conditions and, if relevant, the existing legislation, whatdoes the practice show in the area of burden of proof?


4) Is there any case law testifying the practical situation of holders in their relationshipwith issuers?


5) Is a more binding legislative instrument needed to implement the principle that theburden of proof falls on the issuer?


⇒ Assessment of compliance / non compliance with the Recommendation:/


1) Are adequate and effective means for the settlement of disputes between a holderand an issuer available?


2) On what legal basis are redress procedures based?


3) What kind of information is provided to holders on the settlement of disputes?


4) In practice, what proportion of disputes are solved through a redress procedure orout-of-court?


5) For what reason would holders be reluctant to solve their disputes in court?



⇒ Assessment of compliance / non compliance with the Recommendation:/

3. Conclusion: assessment of the issuers´practice?

- Assessment of compliance / non compliance with the Recommendation:3

- Data collected show that in case of transparency for conditions for transactions, issuers

practice are nearby of fulfilling the requirements laid down in the Recommendation

97/489/EC.

An effort from issuers could be considered in order to improve their information given

spontaneously and not as a response to an specific request from the holder.

In the same way, to improve the requirement of the article 3.2 of the Recommendation about

setting the terms in written form, is necessary to protect holders.

Section III of the Recommendation about obligations and liabilities of the parties to a contract

is not fulfilled in a satisfactory way. So that, to provide information on liabilities and

obligations of holders and issuers must improve.

Notification procedure and liability of the issuer after notification could also be improved. To

clarify the means available to enable the holder notify the loss or theft of the EPI could be

considered in order to holders protection.


Work Package 5

Statistical analysis


COUNTRY QUESTIONNAIRE FOR STATISTICAL ANALYSISSPAIN

Part I – Profile of legislation

1. Does the country considered have a legislation about the EPIs and the transactions between issuersand holders?

? YES? NO

2. If no, is there at least a draft legislation?

? YES? NO

3. Does the country have codes of conduct / codes of best practice?

? YES? NO

If yes, how many ? …“Código de buena conducta del sector bancario europeo relativo a los sistemas

de pago mediante tarjeta” (Code of best practices of European banks referred to cards used as payment

instruments). In fact, this code was the answer of different European Banking Associations to the

Recommendation 88/590/EEC of 17 November 1988(Official journal nº L 317, 24/11/1988). And it

was written after consulting consumer associations and European Commission.

4. Assess the overall compliance of the existing legislation, draft legislation or codes of conduct withthe Recommendation

Select one of the five following marks to assess compliance:

? 1 – there is no or nearly no compliance? 2 – non compliance predominates but there are some non negligeable elements of compliance? 3 - there is a balance of compliance and non compliance? 4 – good ie there is overall compliance but with some non negligeable drawbacks? 5 – perfect or nearly perfect

5. In general, are the consumers involved in the setting-up procedure of the Codes of conduct?

? YES? NO

6. Is the principle of burden of proof reversed in favour of the consumer


? YES? NO

(Regarding the topic or burden of the proof, in the Spanish system there are numerous resolutions that

approach this topic, in general completing in an appropriate way art.7.2.e) of the Recommendation that

settles down on the issuer, in the event of dispute with the holder on the carried out operations, the

burden of proof)

Part II – Assessment of the compliance

The assessment of compliance is conducted on the 5 main criteria which are the headlines of theCompliance check-list (transparency of conditions for transactions, obligations and liabilities of the parties to acontract, Notification procedure and liability of the issuer after notification, burden of proof, settlement ofdisputes).

For each main criteria compliance will be assessed for each “couple” EPI – issuer analysed. Yourassessment will take the form of a mark between 1 (very poor compliance) and 5 (very strong compliance)entered into the matrix concerned and presented on the following pages of the questionnaire.

The significance of the marks is:

? 1 – there is no or nearly no compliance? 2 – non compliance predominates but there are some non negligeable elements of compliance? 3 - there is a balance of compliance and non compliance? 4 – good compliance ie there is overall compliance but with some non negligeable drawbacks? 5 – perfect or nearly perfect compliance

Per country, a selection of 15 EPIs will be analysed through anonymous on-the-spot

surveys in addition to desk analysis and contacts with consumer panels. For the other

EPIs there will be only desk analysis and contacts with consumer panels. This means

that the status of marks allocated to some EPIs will be somewhat more “valid” than for

the other EPIs.

143

1. Transparency of conditions for transactions

LaCaixa

Banesto

BancoSantan

-derCentra

lHispan

o

BancoBilbao

VizcayaArgenta-

ria(BBVA)

SANostra

ElCorteInglés

Bancode

Sabadell

BancaMarch

Bankinter Cajama-drid

Repsol Pryca

Debitcard

4 4 4 4 4 - 4 4 4 4 3 3

Deffereddebitcard

4 4 4 4 4 2 4 4 4 4 4 3

Credit card

4 4 4 4 4 2 4 4 4 4 4 3

E-moneyinstrument

3 3 - 3 3 - - - - 3 - -

144

Companycard

- - - - - 2 - - - - 3 3

Phonebanking

4 4 4 4 4 - 4 4 4 4 - -

Homebanking

4 - - - - - - 4 - - - -

Internetbanking

4 4 4 4 4 - 4 - 4 4 - -

145

Electronictokenson acomputer'smemory

- - - - - - - - - - - -

146

2. Obligations and liabilities of the parties to a contract

La Caixa Banesto BancoSantan-derCentr

alHispa

no

BancoBilbao

VizcayaArgenta

-ria(BBVA)

SANostra

ElCorteInglés

Bancode

Sabadell

BancaMarch

Bankinter

Cajama-drid

Repsol Pryca

Debitcard

2 3 3 3 4 - 3 2 3 3 2 1

Deffered debitcard

2 3 3 3 4 2 3 2 3 3 2 1

Creditcard

2 3 3 3 4 2 3 2 3 3 2 1

147

E-moneyinstrument

2 3 - 3 4 - - - - 3 - -

Company card

- - - - - 2 - - - - 2 1

Phonebanking

2 1 2 2 1 - 2 2 2 2 - -

Homebanking

2 - - - - - - 2 - - - -

148

Internetbanking

2 1 2 2 1 - 2 - 2 2 - -


- - - - - - - - - - - -

149

3. Notification procedure and liability of the issuer after notification

La Caixa Banesto BancoSantan-

derCentralHispan

o

BancoBilbao

VizcayaArgenta

-ria(BBVA)

SANostra

ElCorteInglés

Bancode

Sabadell

BancaMarch

Bankinter

Cajama-drid

Repsol Pryca

Debitcard

2 3 3 3 3 - 2 1 3 2 2 1

Deffered debitcard

2 3 3 3 3 1 2 1 3 2 2 1

Creditcard

2 3 3 3 3 1 2 1 3 2 2 1

E-moneyinstrument

2 2 - 2 2 - - - - 2 - -

150

Company card

- - - - - 1 - - - - 2 1

Phonebanking

1 1 1 1 1 - 1 1 1 1 - -

Homebanking

1 - - - - - - 1 - - - -

Internetbanking

1 1 1 1 1 - 1 - 1 1 - -

151


- - - - - - - - - - - -

152

4. Burden of proof

LaCaixa

Banesto BancoSantan-der

CentralHispano

BancoBilbao

VizcayaArgenta-

ria(BBVA)

SANostra

ElCorteInglés

Bancode

Sabadell

BancaMarch

Bankinter

Cajama-drid

Repsol Pryca

Debitcard

2 1 1 1 1 - 1 1 1 1 2 1

Deffered debitcard

2 1 1 1 1 1 1 1 1 1 2 1

Creditcard

2 1 1 1 1 1 1 1 1 1 2 1

E-moneyinstrument

2 1 - 1 1 - - - - 1 - -

153

Company card

- - - - - 1 - - - - 1 1

Phonebanking

1 1 1 1 1 - 1 1 1 1 - -

Homebanking

1 - - - - - - 1 - - - -

Internetbanking

1 1 1 1 1 - 1 - 1 1 - -

154


- - - - - - - - - - - -

155

5. Settlement of disputes

LaCaixa

Banesto BancoSantan-

derCentralHispan

o

BancoBilbaoVizca

yaArgenta-ria

(BBVA)

SANostr

a

ElCorteInglés

Banco deSabadell

BancaMarch

Bankinter

Cajama-drid

Repsol Pryca

Debitcard

1 1 1 1 1 - 1 1 1 1 1 1

Deffereddebitcard

1 1 1 1 1 1 1 1 1 1 1 1

Creditcard

1 1 1 1 1 1 1 1 1 1 1 1

156

E-moneyinstrument

1 1 - 1 1 - - - - 1 - -

Companycard

- - - - - 1 - - - - 1 1

Phonebanking

1 1 1 1 1 - 1 1 1 1 - -

Homebanking

1 - - - - - - 1 - - - -

Internetbanking

1 1 1 1 1 - 1 - 1 1 - -

157

Electronic tokenson acomputer'smemory

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appendices 5 national report: spain - european...

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