They have a change that can be made to MySQL and one that can be made to PHP. I would try the PHP fix first, try setting the default_charset to utf8 and see if that fixes it. You can set that in the php.ini or by using ini_set('default_charset', 'utf8'); on the page itself (i'd put it in the global file since its on every page).
It took me some more grey hairs and some were pulled out, but I found the solution, thanks to your hint:
//initial character set = utf-8
on top of the global.php file.
MIND THE DASH. I had to put utf-8. utf8 did not work!
Could you please advise your developers to be more consistent with the installation script, especially with the database settings. Had to manually replace all Latin1 collations with utf-8.
Now Señora Carmen is diplayed correctly