The offering of consumer credit by Brazilian fintechs in retail and e-commerce has grown exponentially in the last 5 years.
The granting of credit is largely backed by Brazilian law Bank Credit Notes (CCBs) issued via digital channels by consumers in favor of BaaS institutions and, subsequently, endorsed to receivable funds (FIDCs).
A topic of utmost importance for fintechs and BaaS, see 3 key points about the requirements that court decisions in Brazil demand for the validation of credit instruments (namely CCBs) issued and digitally signed in consumer credit transactions:
1. What the Legislation Requires for Credit Instruments (CCBs) Issued Electronically: The CCB legislation (Federal Law No. 10,931/2004), as amended by Law No. 13,986/2020 in its art. 29, authorizes the issuance of CCBs electronically, establishing that the “signature (…) may occur in electronic form, as long as the unequivocal identification of its signatory is guaranteed”.
2. What Recent Decisions by the Judiciary of São Paulo Require About CCBs Signed Electronically by Consumers? According to recent case law, the requirement to guarantee the “unequivocal identification of its signatory” is key to determining the validity or not of the title issued electronically.
The decisions are that there is a guarantee of unequivocal identification of the issuer of the CCB when multiple signature verification mechanisms are used.
3. What Requirements Do the Court Decisions Understand as Validating the “Unequivocal Identification” of the Consumer Issuing the CCB? The decisions understand that the contract is, as a rule, considered regular when there is, cumulatively, (i) a selfie authenticated by facial biometrics of the issuer, (ii) scanning of their personal document (ID, driver’s license), and (iii) validation through a private signature platform, after authentication via cell phone (sending of token) or encrypted signature, as stated in the identification document presented.
In the absence of any of the above requirements, there are court decisions that accept other forms of identification, such as the adoption of geolocation parameters capable of demonstrating the date, time and place where the consumer was when the CCB was electronically signed.
It is essential that Brazilian retail, e-commerce and other sectors pay attention to the requirements for electronic formalization of credit contracts by consumers, aiming for greater legal security.
