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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.”

				
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