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Move beyond the Electronic Payment: How Well Do You Know eSignatures?

Many consumers are now shifting from paper-based communication to electronically-sent documents and payments. Amidst this change in document sending and payment practices, ARM companies have a duty to play in helping set up and remain compliant with rules and regulations that safeguard convenience in the processes.

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Electronic payments may be covered, however, when you sign documents online, it may not have that kind of coverage in terms of rules and regulations.

The Electronic Signatures in Global and National Commerce Act is popularly known as ESIGN Act has given parties an ability to replace electronic records with paper and place electronic signatures in digital or electronic documents and records instead of wet signatures. The ESIGN Act also contains the law passed by the US Congress, which makes it clear that digital signatures and digital documents carry the same force as well as effect as the pen and paper signatures. They need to be given the same weight and security checks.

What's Electronic Consent?

When it comes to written documents, usually consent occurs by placing the handwritten signature on the document, that's signing the document using pen and paper. The signature you place on the document shows that you have signed that document. The signature confirms that you as the signer you have agreed with what has been written on that document. Legally, it is assumed that, if you did not consent to a document, you wouldn't have signed it. 

Now, that's for the written documents, so what about the digital records or eSign documents?

Regarding electronic consent, it works the same way as handwritten consent. The electronic consent can involve any mechanism that does affirm the person signing the document and whether they agree to the consent terms. You find that many data protection regulations and laws like the GDPR and POPI Act actually don’t require specific forms of consent. Provided that the consent considered informed and that the subject offers it in a voluntary manner, then it is acceptable.

Consent can’t be said to be cut and dry, sometimes it can last forever like in a sale agreement and other times, it can be revoked, for example, revoking a license. There are many ways consumers can consent electronically for example, through double opt-in, click-wrap agreement and browse-wrap agreement.

These kinds of consent may be a little different from eSign consent.

Moving Beyond Electronic Payment

The use of electronic consent is much seen in electronic payments. If you have done online transactions, you know the process applied and the consents you have to make. You need to agree to terms and conditions and other things. When it comes to ESIGN Act, there are sections that are often overlooked and which parties involved in digital signatures need to understand.

One overlooked part is the section that addresses issues of how and when a party can substitute or replace a digital delivery of a statutorily-mandated disclosure or legally required consumer disclosure instead of traditional methods of delivering consumer disclosure. The traditional methods include hand delivery, US postal service, or certified mail. Whether you are using electronic signature free service or the paid versions, you need to ensure that legally mandated disclosures get to the consumer based on the consent to the channel of communication.

Saving on Expenses

Healthcare providers, government bodies, creditors, and third-party or contracted debt collections need to meet the consumer disclosure requirements in eSignature. This way, they are able to make strides in saving money on postage expenses and meeting the increasing needs of consumers to operate and manage their enterprises and businesses using digital communication channels.

The subsection c in the ESIGN Act stipulates that; if a regulation or other kind of rule of law demands that the information associated with transactions be provided and made available to consumers in writing using digital records, then it can be replaced for paper record if the consumer has been given a clear notice to inform him or her of the following things:

  • Consumers need to realize that they can receive the information about debt collection in paper form when they request it
  • Also, in situations where consumers' consent to receiving electronic records, if that consent applies to a single or several transactions, then the consumers have the right to revoking or withdrawing the consent anytime they wish
  • The consumer also needs to be provided with clear notice about the procedures they may follow in revoking consent as well as the consequences or repercussions of doing so for example, the imposition of fees and relationship termination
  • The consumer also has to be made aware of the process he or she may use in updating their contact information
  • Besides, consumers ought to have been provided with a clear, conspicuous notice about the process they can use to get paper disclosures even after consenting to receive digital records
  • An explanation of software and hardware requirement when it comes to access and retention of records need also be provided
  • Another thing to get informed about is that he or she can consent electronically or he or she needs to electronically confirm consent or agreement in a manner reasonably demonstrating their ability to access or receive the information through electronic means.

As for the debt collectors, the eSignature disclosures as found in paragraph c don't need to bother them so much. The most important thing to do is address every point within the disclosure method. Make sure you give information to the consumer prior to them consenting to receive the legal disclosure or documents in an electronic form- be it free eSign or the paid eSignature solutions.

You may think of using email or text messaging to give consumers legally mandated disclosures. These disclosures include the Fair Debt Collection Practices Act’s (FDCPA) notice of validation or a notice on postdated payment or legally required documents like Reg E's in electronic fund transfer. It is important that you ensure your team uses eSignature as much as possible and to your advantage. Doing this can help save you a lot of dollars spent placing stamps on first-class mail containing disclosures being dispatched to consumers.

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Category: Business Services OutsourcingCompany about: CIS Established in 2003, Cyber InfraStructure Pvt. Ltd. or CIS is a leading IT and custom software development company in Central India, USA and UK. Since 2003, CIS has been providing highly optimized technology solutions and services for SMEs and large scale enterprises across the world. CIS has worked with 2100+ clients in more than 100 countries. Their expertise and experience ranges across a wide range of industry domains like education, finance, travel and hospitality, retail and e-commerc ...
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