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Protection for data subjects registered at
the Risk Center of the SBS
Superintendencia de Banca, Seguros y AFP
[Banking and Insurance Superintendency]
-Peru-
October 2008
Agenda
Background
Risk centers in Peru
Rights of data subjects
Role of the SBS and other agencies
Financial culture and dissemination of information
How is information protected?
PROFESSIONAL
INFORMATION
INFORMATION
PREFERENCES
INFORMATION
INFORMATION
INFORMATION
EMPLOYMENT
OBLIGATIONS
ON LOAN
HEALTH
PROTECTION OF DATA
Peru does not have specific legislation for data protection.
However, there is a general regulatory framework to protect
personal information: the right to privacy, the right to
information, habeas data.
Balancing interests
An important role of the
regulatory agency (SBS)
is to balance the general
Risk Credit public interest, which
Management information seeks the soundness of
System Owner
Soundness Privacy
the financial system
through an appropriate
risk management system,
and individuals’ private
interest in protecting their
right to privacy.
Agenda
Background
Risk centers in Peru
Rights of data subjects
Role of the SBS and other agencies
Financial culture and dissemination of information
Public and Private Risk Centers
Peru has two types of risk centers: the SBS risk center and the private
information risk centers, each governed by specific regulations and
procedures so that owners of information can defend and demand their
rights.
Utilities
CCL National Register of
Protests & Delinquency
Financial SBS Risk Center Private Information Risk
(securities)
Centers
system
Evolution of the SBS Risk Center
The SBS Risk Center was established in 1993 for the basic purpose of
supervision, and only collected information at the borrower level. This
database was not as developed as the current one; it was similar to an
Excel spreadsheet.
In 2001 the borrowers’ Credit Report was created to replace the old
format. The new system could be continuously updated and contained
more detailed information.
In 2004 a Committee was formed to design and implement a new risk
center.
In 2007 an agreement was signed with the IDB to develop a Risk Center
for operations that would make it possible to adopt the Basel II
international standards.
Characteristics of the SBS Risk
Center
It is a database with consolidated and rated information on borrower
companies supervised by the SBS, for the purpose of protecting the
soundness of the banking system.
It records obligations assumed by borrowers in the financial system,
including information on the total direct and indirect debt (guarantees),
lines of credit authorized, overdrafts in checking, guarantees, loans with
penalties, etc.
The information reported to the Risk Center is recorded chronologically. It
is never deleted, unlike the situation in the private information risk centers,
which have five- and two-year limits on retention.
Regulatory Framework of the SBS
Risk Center
Law Nº 26702, Ley General de Sistema Financiero y del Sistema de
Seguros y Orgánica de la Superintendencia de Banca y Seguros.
[General law for financial and insurance systems and SBS]
Regulations for evaluation and rating of borrowers and requirement
for data provision, approved by Resolution SBS Nº 808-2003.
Regulations for transfer and purchase of the loan portfolio,
approved by Resolution SBS N° 1114-99.
Circular N° B-2166-2007, Correction of errors in the Borrower’s
Credit Report (RCD) and notification of the Superintendency.
Who can access information in the SBS Risk
Center?
The information is available to:
Companies supervised by the financial and insurance system.
The Central Bank of Peru.
The owner of the information, without charge once per year, for the
latest available month.
Private risk information centers and interested parties in general, upon
satisfaction of the regulatory requirements.
Public institutions by agreement (Public Prosecutor’s Office, INDECOPI,
FONAFE, Comptroller’s Office, SUNAT, and PNP.)
Agenda
Background
Risk centers in Peru
Rights of data subjects
Role of the SBS and other agencies
Financial culture and dissemination of information
Right of access to information
Data subjects have the right to get one credit report per year, from the
SBS risk center as well as from the private centers, covering the latest
month reported.
If the data subject needs information on prior months, or requests a
second report within a year, he or she shall make the corresponding
payment.
Reports issued by the SBS Risk Center contain information on a given
month, showing the name of the data subject, ID document number,
SBS code, number of reporting agencies, identification of same,
principal owed, interest, total balance, and rating.
Owners of the information may only access information on the amount
and rating of their current debts in arrears for less than five years.
Right of access to information
Typical problems:
Users request information not available to them, such as debts in
arrears for more than five years, which is only available to the SBS and
the supervised companies.
Users request information on how many days their debts are in arrears,
to see if the statute of limitations has expired. However, cessation of
collection efforts does not relieve the corporations of reporting the loan
granted, because the law sets no limit on how long the credit
information is kept in the Risk Center.
Right of correction
The data subject has the right to request correction of personal
data and of information on credit obligations.
The SBS can correct errors in personal data—errors in name,
identity document number, or SBS code.
Correction of information reported on credit obligations is the
responsibility of the reporting entity. The Superintendency may
only correct data in the Risk Center by court order.
When an agency becomes aware of an error or inaccuracy in its
reports, it must correct the information within five working days
(Circular N° B-2166-2007).
Right of correction
Typical cases:
Incomplete or incorrect name (SBS)
Error in identity document (SBS)
Homonymy (SBS/reporting company)
Improper classification (reporting company)
Inconsistency (reporting company)
Non-existent or cancelled debt (reporting company)
Rights to challenge information
and receive indemnification
The data subject has the right to challenge the content of
information in any risk center, for which purpose she or he
should apply to one of the agencies authorized to settle
disputes between consumers and financial companies:
INDECOPI or the courts.
The right to indemnification can only be pursued in the courts.
Rights to challenge and receive
indemnification
Typical cases:
Users are unaware of the debt or consider that the amount or arrears
are not accurate.
Users consider that the information reported has caused them financial
or moral damages.
Agenda
Background
Risk Centers in Peru
Rights of data subjects
Role of the SBS and other agencies
Financial culture and dissemination of information
Where can owners of information
recorded at the Risk Center exercise
their rights?
Claim Service System of the financial company itself
(Circular N° G-110-2003)
Consumer Protection Commission
User Service Website– SBS - INDECOPI
(Resolution SBS N° 200-2003) (Legislative Decree N° 728)
Courts
or
Arbitration Tribunals
User Service Website of the SBS
The User Service Website was
established to help reduce the
asymmetry of information
between users and supervised
companies, through the
analysis and resolution of
public inquiries, and attention
to complaints. The SBS also
offers educational materials
and orientation lectures.
Attention to consultations and
orientation
Purple: telephone;
blue: personal;
green: written;
Number of consultations on the Risk Center yellow: e-mail
(as of 8/31/08)
NÚMERO DE CONSULTAS SOBRE CENTRAL DE RIESGOS
( Inf o rm a c ión a l 3 1.0 8 .2 0 0 8 )
1,600
1,488
1,400
1,228
1,200
997 1,032 Most frequent topics:
1,000
800 • Contents of the report
600
• Classification
400
200 • Correction and elimination
0 of information
2005 2006 2007 2008
CONSULTA S • Coordination
• Statute of limitations and
historical data
Attention to requests for reports
NÚMERO DE SOLICITUDES DE REPORTE DE CENTRAL DE RIESGOS
( Inf o rm a c ió n a l 3 1.0 8 .2 0 0 8 )
20,000
18,090 17,979
17,347
Top: Number of reports 16,000
requested from Risk Center as 12,000
10,590
of 8/31/08 8,000
Bottom: Sample system level 4,000
client position report 0
2005 2006 2007 2008
Attention to complaints and
requests for data correction
NÚMERO DE DENUNCIAS Y RECTIFICACIONES DE DATOS
CENTRAL DE RIESGOS
( Inf o r mació n al 3 1.0 8 .2 0 0 8 ) Translation in notes
400
350
300
232
250 136
200
150 60
54
100 179
148 124
50 86
0
2005 2006 2007 2008
DENUNCIA S RECTIFICA CIONES DE DA TOS A CA RGO DE LA SBS
What happens when requests fall outside
SBS jurisdiction?
In 2005 the SBS signed an
interagency cooperation agreement
with the consumer protection
agency—Instituto Nacional de
Defensa de la Competencia y
Protección de la Propiedad
Intelectual, or INDECOPI—to give
consumers of SBS-supervised
services a channel for their
complaints regarding alleged
violations of the consumer
protection law.
The SBS sends INDECOPI any
request for correction of
information in a private risk center,
and disputes arising from the right
of data subjects to dispute the
information.
Agenda
Background
Risk centers in Peru
Rights of data subjects
Role of the SBS and other agencies
Financial culture and dissemination of information
Financial culture projects
Current projects:
Training program for high school teachers on the role and functions of the
financial system (risk center), insurance system, and private pension system
(2007 – 2008).
Inclusion of material on financial culture in high school curricula, in
coordination with the Ministry of Education.
Financial culture projects
Future projects:
Financial culture plan targeting six different groups (2009 – 2011):
High school students
University students
Employees without families
Employees with families
Self-employed workers
Retirees or persons nearing retirement
Dissemination actions
The Superintendency realizes that financial system products are complex
and difficult for the average user to understand. It therefore devotes
special attention to dissemination in order to bridge the information gap.
To this end the SBS has developed educational materials to make
consumers increasingly aware of the information in the risk centers; of the
financial consequences that can ensue from the report of delinquent
debts; and of the importance of the risk center as a tool for achieving a
healthy and sound financial system that helps people avoid going too
heavily in debt, which harms the individual as well as the system.
Informative flyer
Informative flyer
A new flyer with FAQs of users of
the SBS service and consultation
mechanisms is pending.
Comic
Advice on the
consequences of a
negative report in the
Risk Center:
“I don’t want to
discourage you,
Alfredo, but banks
may or may not
lend you money …
to decide this they
check your
payment capacity
and your credit
record.”
Comic
(Translation in notes)
Explanation of the Risk
Center and the source of
data it records, and of the
difference between it and
the private risk centers.
..\..\..\..\Escritorio\central_de_riesgos_1
1326.exe
Institutional video
Each year the SBS User
Service Website is visited by
about 28,000 users, who
request various kinds of
information on the supervised
systems. The SBS has
prepared informative videos
on the FAQs, including the
Risk Center.
Pending tasks
Hold periodic meetings with financial institutions to remind them of the
rights of data subjects, seeking to reconcile their interests with those of
the users.
Prepare educational materials with tips for avoiding over-indebtedness.
Nationwide educational campaign to make the public aware of the kind of
information recorded at the risk center, their rights, and how credit
reports affect their chances of access to or continuation in the financial
system as borrowers.
Thank you
Constitution of Peru
“Article 2°.- Every person has the right:
6. To have information services, whether computerized or not,
public or private, not supply information that infringes upon
personal and family privacy.
7. To respect and to their good name, personal and family privacy,
and their own voice and image.
Anyone affected by inaccurate statements or injured in any form
by the media has the right to free, immediate, and proportional
rectification, without prejudice to taking legal action.”
Constitution of Peru
“Article 2°.- Every person has the right:
5. To request, without giving a reason, any information
needed from any public entity, and to receive it at cost
within the time prescribed by law. Exceptions are made for
information affecting privacy and that which is expressly
excluded by law or for reasons of national security.”
