[Random-bits] CPT Statement on E-Sign bill

[James Love]

FMI:   Jamie Love, love@cptech.org, 202.387.8030, hm 703.522.4380
       Vergil Bushnell, vbushnell@cptech.org 202.387.8030

    Today a consumer group criticized the new US law on electronic
signatures.  Jamie Love, Director of the Consumer Project on 
Technology, stated:

   "People should understand that this bill is about legal issues.  It
does not create any new technology.  The bill was pushed to solve
the problems of businesses, and not to protect consumers.   The 
legislation will increase the risks of identity theft.  According
to the National Consumer Law Center, the bill places places new 
burdens on consumers to provide evidence in disputes over electronic 
transactions.  

   "The E-sign Act increases the legal obligations on consumers who
interact with busineses on the Internet and through other digital 
media.

   "The E-sign Act raises the legal status of agreements that are
'signed' using electronic technologies, including such authorizations
as click-on buttons on web pages, as well as many other electronic
authorizations, of varying degrees of security.    On the one hand, 
it overrides other statutes and regulations, and declares as a general 
rule, that no contract or signature can be denied legal effect, solely 
on the grounds that it was in electronic form.  On the other hand, it 
fails in important ways to guarantee that consumers will be protected 
from  fraud or unfair business practices in a wide range of matters.

   "In general, electronic transactions may leave consumers more 
vulnerable to unauthorized use, compared to conventional transactions.  
Technology residing on a consumer's personal computer can hardly be 
expected to be shielded from malicious intrusions.  Unlike a handwritten 
signature, if an electronic authorization is stolen or forged, the
legitimate owner will be hard-pressed to prove that it was used
fraudulently.  The E-sign Act contains no provision to limit the
liability of consumers victimized by fraudulent spending.               

    "Congress rejected pleas from consumer groups that the e-sign bill
include a provision to ensure that a contract cannot be altered once a
consumer's digital signature is affixed.  The Senate langauge on this
was dropped from the bill that was signed by the President today.
The risk is that consumers will be victimized by changes in contractual
text, inadvertent or otherwise, eroding the consumer's ability to 
reproduce copies of digital contracts at a later date, or admit such 
documents as evidence.               

   "The digital signature bill is likely to hurt consumers lacking
access to the Internet, especially low-income consumers and
minorities.   The E-sign Act does allow the consumer the choice of
receiving a contract in electronic or paper form.  However, given the
prevalence of adhesion contracts in business-to-consumer transactions,
this 'choice' may very well be "take-it-or-leave it," or constrained
by penalty fees for paper-based contracting, a practice not prohibited
by the legislation.

Other experts that have expressed opinions on the E-sign Act are:

-  Vergil Bushnell
   Consumer Project on Technology
   http://www.cptech.org/ecom
   202.387.8030  vbushnell@cptech.org

- Margot Saunders
  National Consumer Law Center
  202-986-6060

-Frank Torres/ David Butler
 Consumers Union
 202-462-6262


=======================================================
James Love, Director           | http://www.cptech.org
Consumer Project on Technology | mailto:love@cptech.org 
P.O. Box 19367                 | voice: 1.202.387.8030
Washington, DC 20036           | fax:   1.202.234.5176
=======================================================