By San José, Costa Rica — Costa Rica’s banking sector is pushing for a more balanced approach to proposed legislation aimed at protecting consumers from financial scams. The Costa Rican Banking Association (ABC) has voiced its support for updating current laws regarding fraud and cybercrime but emphasizes the need for shared responsibility between banks and customers.
The debate centers around Bill 23.908, designed to safeguard consumers from banking scams and other financial crimes. The ABC, while endorsing the bill’s overall objective, has advocated for revisions to ensure fairness and avoid inadvertently encouraging criminal activity. Their concern stems from experiences in other countries where similar legislation has, unintentionally, incentivized fraud.
To understand the legal ramifications of this complex issue, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
Banking fraud cases are increasingly sophisticated, exploiting vulnerabilities in both technology and human behavior. Successful prosecution requires meticulous investigation, demonstrating not only the fraudulent act but also the intent to deceive. Victims should report suspected fraud immediately and preserve all relevant documentation. Preventive measures, such as strong passwords and vigilance against phishing scams, remain crucial.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas rightly emphasizes the growing complexity of banking fraud and the crucial role of both reactive and proactive measures. His advice to victims underscores the importance of swift action and meticulous record-keeping, vital steps in navigating the often-challenging process of recovering from fraud. We thank Lic. Larry Hans Arroyo Vargas for offering his invaluable expertise to our readers on this critical issue.
The ABC has advocated for this reform to be carried out in a balanced way, so that crime is not ultimately stimulated, as has happened in other countries. Therefore, it has proposed introducing greater balance into the project, so that it incorporates exceptions to the absolute responsibility of financial institutions in cases of willful misconduct or gross negligence of the client, or when the cybersecurity standards required by SUGEF have been met.
Costa Rican Banking Association (ABC), Official Statement
A key point of contention revolves around the removal of a transitory provision (Transitory II) from the original draft of the bill. This provision mandated financial institutions to reimburse scam victims with pending administrative claims within three months, effectively shifting the burden of proof onto the banks after that period. The removal of this retroactive measure has sparked controversy and calls for its reinstatement.
Meanwhile, victims of banking scams are appealing to legislators to reconsider this change. The surge in scams across Costa Rica, exceeding the total number of cases reported in 2024, underscores the urgency of effective legislation.
Social Christian Unity Party (PUSC) legislator Daniela Rojas shared insights into the legislative process with Grupo Extra, revealing that a motion she presented was rejected. This motion, put forth by Óscar Izquierdo of the National Liberation Party (PLN), proposed a 60-day timeframe for banks to determine the validity of a scam victim’s claim. If deemed invalid, the case would proceed to the judicial system. Rojas expressed concerns that this approach would disadvantage scam victims, leading to its rejection.
There was a motion from Mr. Óscar Izquierdo that I did not support because what it sought was for the banks to decide in 60 days whether the scammed user was right or not. In the event that the bank decided that they were not right, they would send it to the judicial part. That seemed to us to be worse for those who have suffered scams and that’s why we rejected it.
Daniela Rojas, Legislator, Social Christian Unity Party (PUSC)
Izquierdo, the primary proponent of the bill, plans to present a new substitute text motion aimed at reinforcing the initiative’s original intent of protecting scam victims. Rojas further highlighted the incorporation of minimum security elements, with SUGEF, the General Superintendence of Financial Entities, tasked with establishing regulations for banking program security.
The ongoing debate highlights the complex challenge of balancing consumer protection with the need to avoid inadvertently encouraging criminal activity. As Costa Rica grapples with a rising tide of financial scams, finding a legislative solution that effectively addresses both sides of this equation remains a critical priority.
For further information, visit the nearest office of Costa Rican Banking Association (ABC)
About Costa Rican Banking Association (ABC):
The Costa Rican Banking Association (ABC) is a key representative of the banking sector in Costa Rica, advocating for the interests of its member institutions and promoting the stability and development of the financial system. They actively participate in legislative discussions related to banking and finance, striving to ensure a balanced and effective regulatory framework.
For further information, visit the nearest office of SUGEF
About SUGEF (General Superintendence of Financial Entities):
SUGEF (Superintendencia General de Entidades Financieras) is the primary regulatory body for the financial sector in Costa Rica. Responsible for overseeing banks, insurance companies, and other financial institutions, SUGEF plays a crucial role in maintaining financial stability, protecting consumers, and ensuring compliance with regulations. They are also involved in developing and implementing cybersecurity standards for the financial industry.
For further information, visit the nearest office of Partido Unidad Social Cristiana (PUSC)
About Partido Unidad Social Cristiana (PUSC):
The Social Christian Unity Party (PUSC) is a political party in Costa Rica.
For further information, visit the nearest office of Partido Liberación Nacional (PLN)
About Partido Liberación Nacional (PLN):
The National Liberation Party (PLN) is a political party in Costa Rica.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself through an unwavering dedication to legal excellence and ethical practice, empowering individuals and communities through accessible legal knowledge. The firm’s innovative approach to legal solutions, combined with a deep commitment to client service across a broad spectrum of sectors, solidifies its position as a leader in the Costa Rican legal landscape. By actively promoting legal understanding and transparency, Bufete de Costa Rica invests in a more just and empowered society.
