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Consumer Banking and Payments Law: 11.4.3 E-Sign Consent Must Reasonably Demonstrate Consumer’s Ability to Access the Electronic Information

E-Sign requires that the consumer consent electronically “in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information.”202 This means that consumers must demonstrate, not just affirm, that they have access to the equipment and programs necessary to receive, open, and read the relevant electronic documents.203

E-Sign’s legislative history states:

Consumer Banking and Payments Law: 11.4.4a Application of Consumer Consent Requirement to Truth in Lending Act Disclosures

Because most Truth in Lending Act (TILA) disclosures are required to be in writing,219 when the creditor provides TILA disclosures in an electronic format, compliance with E-Sign’s consent requirement is a necessary pre-requisite to TILA compliance.220 One exception is that TILA regulations allow for some disclosures of information made in mail or telephone orders to be delayed so long as the information

Consumer Banking and Payments Law: 11.4.5 Application of Consumer Consent Requirement to Authorization for Recurring EFTs

The Electronic Fund Transfer Act (EFTA) provides that recurring electronic funds transfers from a consumer’s account (called “preauthorized electronic funds transfers” or PEFTs) “may be authorized by the consumer only in writing, and a copy of such authorization shall be provided to the consumer when made.”232 This does not require that the consumer’s consent be in writing.

Consumer Banking and Payments Law: 11.4.9 Federal Agency Rulemaking Can Alter Consumer Consent Requirements

E-Sign provides that a federal (not a state) regulatory agency may exempt certain records from the special consumer consent requirements only if such exemption is necessary to eliminate a substantial burden on electronic commerce and will not increase the material risk to consumers.334 This goes beyond the ability of a federal agency to interpret E-Sign in a way consistent with section 7001.335 This gives the federal agency authority to limit the consumer consent

Consumer Banking and Payments Law: 11.4.11 Practice Tips for Consumer Consent Issues

Failure to obtain E-Sign consent means that the written disclosures required by federal or state law were not properly provided. The consumer’s legal claim for this failure is not under E-Sign, but the law requiring those disclosures. For example, if a TILA disclosure is provided electronically and the consumer did not provide E-Sign consent for that electronic disclosure, the consumer’s remedy is under TILA.

Consumer Banking and Payments Law: 11.5.3 Does an Oral Record Qualify As an Electronic Record?

Whether a notice, disclosure, or other record can be provided orally depends on a number of factors, including whether the disclosure is made to a consumer, whether existing law requires the disclosure to be made in writing, and whether UETA or E-Sign applies.371 One rule is clear—if the record replaces a writing required to be provided to a consumer, E-Sign prohibits an oral record from qualifying as an electronic record.372 However, an oral record could qualify as an

Consumer Banking and Payments Law: 11.5.4.1 E-Sign and UETA Requirements

E-Sign states that nothing in the Act “affects the content or timing of any disclosure or other record required to be provided or made available to any consumer under any statute, regulation, or other rule of law.”374 More generally, it states that E-Sign does not limit or affect any legal requirement other than those requiring that records be written.375 The legislative history indicates that this language was intended to preserv

Consumer Banking and Payments Law: 11.5.4.2 Standards for Conspicuousness Requirements

A common legal requirement is that a disclosure be conspicuous, and an electronic disclosure meeting such a requirement must be conspicuous as well. This creates new challenges as to whether an electronic disclosure is in fact conspicuous when the disclosure is placed off the screen or placed on a separate page altogether.383 Can the seller require the consumer to click on a chain of links before reaching the disclosures?

Consumer Banking and Payments Law: 11.5.5.1 General

If a statute requires that information be delivered in a certain way, what restrictions are there as to the method of electronic delivery? If a statute specifies the exact method of delivery, such as certified mail with return receipt requested, must an electronic version of that information be delivered in the same fashion? And, assuming a method of delivery is allowed, how are disputes resolved when the consumer claims never to have received the information?

Consumer Banking and Payments Law: 11.5.5.5 Proof of Delivery

Separate from the issue of how electronic records must be transmitted is the issue of whether they have in fact been transmitted when the consumer disputes receiving the record. For example, how are courts to decide whether information has been emailed when a consumer testifies that the email was never received? E-Sign does not provide any guidance on this issue. UETA establishes rules to determine the time and place of sending and receipt,421 but not about the manner of proving receipt.

Consumer Banking and Payments Law: 11.6.1 General

In order for an electronic act to carry the significance of a signature, that act must meet the definition of an “electronic signature.” Under both E-Sign and UETA, an “electronic signature” is defined as an “electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”432 As noted by the authors of UETA—

Consumer Banking and Payments Law: 11.6.2 Examples of Electronic Signatures

E-Sign and UETA do not limit the range of electronic signatures. An electronic signature does not require a digital signature or any special security device in order to be an effective signature. In fact, E-Sign explicitly preempts state laws favoring certain electronic signature technologies.456 An electronic signature could consist of:

Consumer Banking and Payments Law: 11.6.3.1 Generally

The question of whether a person has evidenced an intent to sign an electronic document using an electronic signature is somewhat linked to the question of whether that person agreed to conduct a transaction by electronic communications. However, there can be important distinctions.

Consumer Banking and Payments Law: 11.6.3.3 Signatures Applied to Click-Through or Hyperlinked Electronic Records

Where a website requires the reader to click through different screens, there is a question as to whether the simple act of clicking is sufficient to evidence an intent to sign the agreement that is either shown on the screen, or simply referred to on the screen with a hyperlink to the record that is being signed. Agreements created in this way are called “browsewrap” or “clickwrap” agreements.

Consumer Banking and Payments Law: 11.6.4.2 Applying Forgery Claims to Electronic Transactions

The concept of authentication—i.e., determining the parties with whom one is doing business—in the black box of electronic commerce is completely absent from both laws authorizing electronic signatures.539 Instead, the method and process of party and document authentication is left to the marketplace and common law.540 Courts have determined that the burden of proving the validity of the electronic signat

Consumer Banking and Payments Law: 11.6.4.3 Ratification

Generally, one is considered to have ratified an electronic contract by their actions—including discussing, by email, the condition and timing of delivery of those goods.586 Some courts have conflated the issue of whether some agreement was reached with whether the specific agreement to which the party is being held was agreed to with an electronic signature.