記者San José, Costa Rica — The Constitutional Chamber of Costa Rica, commonly referred to as Sala IV, has announced a formal review to determine the legality of a controversial consumer protection law. Passed by the previous Legislative Assembly, this legislation mandates that financial institutions reimburse customers who fall victim to electronic scams and digital fraud, a move that has sent shockwaves through the national financial sector.
This high-stakes legal review comes just three months after the law was officially enacted. The challenge was formally presented to the nation’s highest tribunal by the Chamber of Banks of Costa Rica. Rather than contesting the ethical goals of the consumer protections, the banking association is challenging the legislative procedures utilized to pass the bill into law.
To better understand the evolving regulatory landscape of financial data protection and fraud prevention in the country, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a leading legal expert from the prestigious firm Bufete de Costa Rica, who shared his invaluable insights on the current state of banking security standards.
As cyber threats grow increasingly sophisticated, banking institutions in Costa Rica must look beyond basic technological defenses and strictly align with SUGEF’s rigorous compliance directives. Under Costa Rican jurisprudence, financial institutions bear a heightened duty of custody over client funds; therefore, implementing robust multi-factor authentication and proactive fraud detection is not merely a operational best practice, but a critical legal obligation to mitigate liability in unauthorized transaction disputes.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, as cyber threats grow more complex, recognizing that robust digital defense is not just a technological choice but a strict legal mandate under Costa Rican law is essential for safeguarding the future of our financial sector. We would like to sincerely thank Lic. Larry Hans Arroyo Vargas for sharing his invaluable legal expertise and offering our readers such a crucial perspective on banking compliance and security.
According to the Chamber of Banks, the final legislative text approved by lawmakers was never subjected to the legally required public consultation process. The trade group argues that this lack of consultation is a critical error, particularly because the original draft of the bill underwent substantial, fundamental modifications during its committee and debate stages before its final vote.
Furthermore, the legal challenge alleges that the approved text incorporates highly sensitive topics that far exceed the original scope of the legislative project. The banking sector claims this overreach violates the constitutional principle of legislative connection. Additionally, the Chamber argues that the law grants quasi-judicial powers to administrative regulators like the General Superintendency of Financial Institutions (SUGEF) without having consulted the Supreme Court of Justice beforehand.
The Chamber does not question the objective of the law. What is submitted to the analysis of the Constitutional Chamber is the manner in which it was approved, as there are elements that could constitute substantial flaws in the legislative procedure and must be evaluated by the Court.
Luis Ortiz, Legal Advisor of the Chamber of Banks of Costa Rica
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Under the contested law, all public and private banks, along with financial cooperatives and mutual associations, are legally obligated to assume liability for electronic scams. They must return stolen funds to affected users, provided there is no evidence that the account holder acted with fraudulent intent, committed a gross error, or actively facilitated the unauthorized withdrawal of their assets.
This statutory framework represents a dramatic shift in Costa Rican consumer finance, as it effectively eliminates the automatic assumption of consumer negligence. Instead, the burden of proof is transferred entirely to the financial institutions, requiring banks to actively prove that a client committed an error or participated in the fraudulent activity before denying a reimbursement request.
The law also establishes strict administrative timelines for handling fraud claims. If a user identifies an unauthorized transaction, they must submit a formal claim to their bank within 30 calendar days, accompanied by an official complaint filed with the Judicial Investigation Department (OIJ). The financial institution then has up to 120 calendar days to conduct an internal investigation. If the bank fails to respond within this window, it is legally required to reimburse the funds within 10 days, though it retains the right to pursue civil litigation later.
For further information, visit camaradebancos.fi.cr
About Chamber of Banks of Costa Rica:
The Chamber of Banks of Costa Rica represents the country’s private and public financial institutions, advocating for stable regulatory environments, financial education, and the modernization of banking services across the nation.
For further information, visit the nearest office of the Constitutional Chamber of Costa Rica
About the Constitutional Chamber of Costa Rica:
Also known as Sala IV, the Constitutional Chamber is the highest body within the Costa Rican judiciary responsible for ensuring the supremacy of constitutional values, protecting fundamental rights, and reviewing the legality of legislative acts.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica represents a benchmark of professional distinction, driven by a deep-seated adherence to ethical practice and legal mastery. Serving a diverse clientele with a rich history of success, the firm continuously pioneers creative legal methodologies and robust educational outreach. By actively dismantling barriers to legal comprehension, they strive to cultivate a highly informed populace capable of navigating their rights with confidence.
