CHILE Law and Practice Contributed by: Alberto Alcalde, María Catalina Zegers García-Huidobro and Pía Robledo, Puga Ortiz
12. Fraud 12.1 Elements of Fraud
12.3 Responsibility for Losses Under Law No 21,673 (May 2024), amending Law No 20,009, issuers must provisionally restore disputed funds within ten business days for cards and 15 days for ATMs. Providers are liable for losses from misin - formation, misuse of funds or cybersecurity breaches if authentication systems fail. The mandatory restitu - tion threshold is no longer fixed at UF 35; it is now a regulatory range between Unidad de Fomento (UF) 15 and UF 35 set by the Ministry of Finance. Crucially, issuers may now request a suspension of restitution before the local police court within three business days if there is evidence of gross negligence or fraud by the user. Providers are also liable for losses arising from unlaw - ful data processing or breach of governance stand - ards, unless external systemic market risks apply.
Fraud in the Chilean fintech sector is addressed through both administrative sanctions and criminal penalties. The CMF’s primary areas of focus include: • misrepresentation – intentional provision of false financial statements or misleading data; • market manipulation – artificial price influence or fictitious transactions; • unauthorised use – misuse of client funds or assets held in custody; • cyber fraud – exploiting authentication weaknesses or unauthorised transactions via APIs; and • inducement to error – misleading advice or tenden - tious investment recommendations. Regulatory oversight prioritises transparency and ensures entities operate with proper FSPR registra - tion. Violations may result in registration cancellation or criminal prosecution for financial crimes. In open banking, the focus shifts to payment initiation fraud and ensuring SCA to prevent unauthorised transfers. 12.2 Areas of Regulatory Focus See 12.1 Elements of Fraud .
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