Businesses Seeking Changes to E-Sign Act

By Patrick Thibodeau, Computerworld |  Business

The act, also referred to as E-Sign, became law in October, but a provision in the legislation required the Federal Trade Commission and the Department of Commerce to investigate the burdens and benefits of the law's consumer consent provisions and report back to Congress. The two agencies will hold a workshop on Tuesday to examine the issue.

John Buchman, general counsel at Arlington, Va.-based ETrade Bank, a subsidiary of ETrade Group Inc., said the main problem with the E-Sign legislation is the underlying premise that businesses are disinclined to protect consumers.

"There is this concern [among consumer groups that] in our haste to try to save money by not mailing out paper notices, we are going to run roughshod over consumer wishes, when in fact, we have every incentive to do what the customer wants us to do -- otherwise, they will just go to another Internet bank or online brokerage firm," said Buchman. "What would be our incentive to want to get the customer upset with us?"

The Next Battle

Federal agencies, as required by law, are reviewing the consumer consent provision of the E-Sign Act. They will report to Congress later this year.

Business view: E-Sign's language is too soecific and won't keep up with technology. Customers may resent consumer consent requirements

Consumer groups: Consumer protection provisions should be strengthened. Consumers may be at risk due to bad practices.

The law imposes a number of obligations on businesses, including a requirement that a consumer must "reasonably demonstrate" that he can accept materials electronically. If a consumer provides a company with an e-mail address over the telephone or by mail, for instance, the law requires that the consumer must also demonstrate that he can in fact conduct business electronically.

Buchman said he believes that redundancy may annoy some customers.

The E-Sign Act's requirements prompted Wachovia Corp., a financial services company in Winston-Salem, N.C., to make design changes to its Web site, said Ericka Crandall, manager of e-business policy at Wachovia. The company now has an E-Sign notice that spells out consumers' rights under the law. A consumer must first click on that agreement before clicking on the online services agreement.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question
randomness