New Criminal Figures: Credit Card Law in Guatemala

Cristian Rojas, Director of the Criminal Litigation Department at Alegalis in Guatemala, speaks to us about the new criminal figures for Credit Cards

The emerging criminal phenomena of recent years have caused adverse effects on the behavior of the region’s financial systems, especially for Guatemala, which happens to be the country with more actions aimed at financial fraud in Latin America. These actions are nothing more than the reflection of the absence of a defined criminal policy by the State, which allows to find a protection to the juridical goods protected by the Political Constitution of the Republic and that given the circumstances the Public Ministry has had to resort to use other criminal figures -analogous- such as fraud, falsehood and other related ones, which contemplate generic governing verbs according to the Penal Code (Decree 17-73) for certain specific cases in order to respond to certain offenses.

It was not, until 2015 that Decree 7-2015 of the Congress of the Republic was enacted, which framed the "Credit Card Law"; a regulation consisting of 43 articles aimed at: "establish the legal framework to regulate operations through credit cards, credit and purchase-sale cards carried out through them, and of the relations between issuer, operator, cardholder and affiliate", and that also attempted to typify criminal figures such as: (a) Credit card cloning; (b) Exploitation of cloned credit card; (c) Manipulation of credit card data; (d) Fraudulent use of credit card, and its aggravating circumstances, as well as the incorporation of another specific criminal type to the Criminal Code, called Swindle by Credit or Debit Card, which allowed not only the application of new criminal figures for the commission of unlawful acts, but also the possibility of imposing a relevant sanction compared to the existing - generic - criminal types.

Such decree in reference was subject to unconstitutional actions, which led the Constitutional Court to declare the unconstitutionality of a general law in a judgment dated December 20, 2018 on the grounds that there was a contravention to Article 133 of the Political Constitution of Guatemala, having as a consequence to leave without effect the law and therefore the criminal types regulated in such legal body due to vices interna corporis.

Subsequently, in 2019, Congressmen and Congresswomen of the Republic presented a new bill aimed at approving the "Credit Card Law" with the purpose of protecting the consumer or cardholder for true equality between obligations and rights, which was approved by the Congress of the Republic on February 15, 2024 as Decree 2-2024 and promulgated by the President of the Republic on February 29, being published in the Official Gazette of Central America on March 1, 2024, in which, in its Chapter V, Section II, it proceeds to reform Chapter II of Title VIII of the Penal Code, concerning the Forgery of Documents, leaving the title of Chapter II as: "Forgery of Documents and Credit Cards", which was separated into Sections - I and II-, with Section II concerning the forgery of credit cards.

The following criminal offenses were added:

a) Article 327 "B" [1] - Cloning of credit or debit card, with a penalty of 6 to 10 years imprisonment and a fine of Q. 150,000.00 to Q. 500,000.00.

b) Article 327 "C" - Use of illegal credit or debit card, with a sanction of 5 to 8 years of imprisonment and a fine of Q. 50,000.00 to Q. 150,000.00.

c) Article 327 "D" - Distribution and commercialization of illegal credit or debit card, with a sanction of 6 to 8 years of imprisonment and a fine of Q. 100,000.00 to Q. 200,000.00.

d) Article 327 "E" - Fraudulent use of credit or debit card, with a sanction of 3 to 5 years of imprisonment and a fine of Q. 25,000.00 to Q. 50,000.00.

e) Article 327 "F" - Aggravating Circumstances, the penalties shall be increased by two thirds for the previous articles when the action is committed by a director, manager, executive, legal representative, administrator, official, factor, owner, employee, or person of trust of the issuer, operator or affiliate.

Furthermore, new criminal offenses are being incorporated into the legal system with the purpose of sanctioning fraudulent practices among issuers, operators, affiliates, and users of credit cards. There are also criminal penalties for actions aimed at the fraudulent and unauthorized use of debit cards, which allows for equal protection for consumers that was not present in the credit card legislation declared unconstitutional in 2018.

The mentioned criminal offenses carry significantly higher penalties compared to existing criminal offenses in the Penal Code such as fraud, forgery, and others related. In addition to imposing the main penalties of imprisonment and fines, some of the newly indicated crimes are non-commutable because they exceed the 5-year imprisonment limit set by the Penal Code for commuting offenses. Therefore, there must be execution of the prison sentence imposed in a final judgment, without prejudice to any specific or alternative penal procedure that may correspond in favor of the accused or convicted person.

It is worth highlighting that part of Decree 2-2024 comes into effect immediately after its publication, that is, partially. However, for the offenses contained in the law, these will come into effect six (6) months after its publication. Therefore, it is necessary for the State of Guatemala through the Ministry of the Interior, the Public Prosecutor’s Office and the Monetary Board to assume the corresponding commitments and cooperation in order to take direct participation in combating criminal actions that threaten the country’s financial and credit system, assume the corresponding commitments and cooperation in order to take direct participation in the fight against criminal actions that threaten the financial and credit system of the country, allowing the economic sector and its actors to continue with the promotion of credit opportunities and facilities through trust, security and transparency among affiliates, issuers, operators and cardholders.

[1] The Article 327 "B" is currently assigned to the offense of "Aggravation for immigration offenses" contained in the same article and clause of the Penal Code, which is derived from the offense of "Suppression, concealment, or destruction of documents" according to Article 327. Therefore, in the author’s opinion, reform by the Congress of the Republic of Guatemala is imminent in order to establish a numbering system that is appropriate, logical, and consecutive to avoid duplication in the legislation’s articles.

About Cristian Rojas:
Cristian has developed his professional practice at ALEGALIS since 2013, specifically in advising, prevention, analysis, and litigation in the areas of constitutional, administrative (governmental and municipal agencies), civil, criminal, and labor law.

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