Financial consumer protection against electronic fraud: its step to legal sanction

On October 4, 2022, House Bill 223 of 2022 was filed, which seeks to introduce amendments to Law 1328 of 2009, also known as the Financial Consumer Protection Regime. The bill, through which measures are established in order to protect the financial consumer against crimes regarding information and data in the financial sector and other provisions are enacted, seeks to establish further and better tools to protect the rights of cardholders who use the services of credit establishments.

The need to establish protection mechanisms arises from the evident boom of fraud through virtual means and the consequences derived from this, which on many occasions are expected to be assumed by the consumers themselves on the grounds of negligence, for example. 

The bill seeks to introduce definitions of key terms for its purpose, such as: 

a) Electronic or cyber fraud: Electronic or cyber fraud understood as all punishable acts or conducts established in the Colombian legal system on the matter. This includes practices known as phishing, phraming, vishing and smishing 1 i. Phishing: It is the theft of personal information in order to Access credit sources, mostly through fake electronic links. ii. Pharming: A method of fraud in which a malicious code is installed in an electronic device to gain access to it. iii. Vishing: Similar to Phishing, only that this is carried out by telephone. iv. Smishing: It is the use of text messages with URLs of telephone numbers to carry out scams. .

b) Professional Risk: This is the risk assumed by financial institutions and/or credit establishments for carrying out financial activities, and which is not transferable to the financial consumer. 

c) Dominant Position of the Financial Institutions and Credit Establishments: It is understood that financial institutions and/or credit establishments have a dominant position vis-à-vis the financial consumer, as they have adhesion contracts and are the ones who determine the service channels and technological platforms for the provision of services to their clients, in accordance with the law. 

Likewise, the project intends to modify and add different articles from Law 1328 of 2009, by means of which the responsibilities of the supervised entities and their special obligations are adjusted, taking into account that the banking activity is professional, habitual and lucrative and its performance requires high standards of diligence, security, control, reliability and professionalism, which also have to be addressed in terms of security of the information that is transmitted by virtual or electronic means. Therefore, the modifications seek to apply what has been established by the Colombian Supreme Court of Justice in repeated rulings regarding the level of responsibility that must be assumed by the entities supervised by the Financial Superintendency of Colombia, through the implementation of mechanisms that “guarantee that in the event of virtual or electronic fraud of the entity, the financial consumer´s resources will be returned and access to them will be guaranteed in a timely manner and without delay”. 

The project also aims to promote timely and efficient response mechanisms in favor of the financial consumer, as well as mechanisms to implement policies on any type of clause that restricts the right of the financial consumer. These reforms free the burden on the financial consumer in response to the asymmetric position they have with regard to financial institutions and credit establishments. 

The bill received a positive report for its first debate in December 2022, with proposed adjustments to grammar and minor amendments that do not alter the bill´s spirit. The Third Constitutional Committee of the House of Representative was suggested to lead the first debate, and the bill is currently in committee. 

If you wish to know more about the bill, we invite you to consult the following link https://www.camara.gov.co/bancos-0.