If Congress Endorses E-Signatures, Will Consumers? —continued

PostX primary serves the financial industry; Morrissey explained how the firm has already helped deliver more than 5 million authenticated documents to date.

"PostX Express delivers customer information to the customer's desktop. The customer signs up for the service, and the documents are sent regularly," Morrissey explained. "The sender 'authenticates' themselves and the user can open documents using their agreed upon password."

"The rules for delivering trade confirmations and statements are covered by the SEC and NASD," Morrissey said. "To open a brokerage account requires a signature and currently this is being done on paper. PostX currently sells applications that can be bought by companies to conduct business with other companies over the Web."

PostX is available to businesses operating on an NT4 platform, but the firm plans to offer its authentication services on Windows 2000, UNIX or LINUX systems, soon.

Jet speed
JetForm Corporation provides a paper-Web hybrid service that is certain to profit from the E-SIGN law. Over the past five years JetForm developed its suite of XLM-based forms for Web, e-mail and mobile Internet users.

Eric Stevens, JetForm vice president of research and technology and overall e-evangelist said the digital signature legislation is a critical milestone in the shift from traditional paper-based systems to digital processes.

"While many industries were able to take advantage of electronic technologies to improve efficiencies, many laws required the presence of a physical signature on a physical document in order for the transaction to be legally binding," Stevens said. "This law clears a major hurdle that has blocked business and government from moving to the next level of process automation."

Stevens added that the technology to support e-mail and form authenticity has been available for half a decade, but that laws limited using the advanced communication system.

"This has never been a technological limitation, but rather a legal and cultural limitation," Stevens said. "This legislation paves the way for our customers to be able to automate all of their processes, not just those that affect employees or select partners."

Ultimately, Stevens said that the law is a big step toward validating the use of e-signatures in business transactions.

"The passage of this legislation begins the process of raising the awareness with government and industry that the use of electronic signatures, transactions and records is not only possible, but encouraged," Stevens said. "This legislation removes one of the major barriers that was stopping organizations from moving to the next level of organizational automation."

For the last ten to fifteen years governments and businesses have been taking a risk when they automate their organizations. If they completely eliminated the under-pinning of paper filing systems, they risked having a judge toss disputes out of court because they could not provide suitable backup for their position.

If governments and businesses retained the paper-based documents, then they risked losing the value of automation on their operating budgets and bottom line.

The law embraces e-signatures with the legal support required to fully implement e-transactions and e-records. Because the law is erected around an "opt-in" standard, it ensures that consumers who do not want to use the Internet or do not have Web access for e-business transactions will not be disenfranchised by technology.

As the American economy melds into a Web-paper hybrid business world, it's critical that everyone can gain access to services in the manner they wish to do so.

Paper laws
All the same, the law requires that certain documents still be delivered on paper to carry the full force that crumpling correspondence can offer. Cancellation of basic services like water, power and gas, as well as court orders, eviction notices, cancellation of health or life insurance, product recalls and paperwork to accompany shipments of hazardous materials must still be sent through U.S. Mail.

The law also allows financial institutions to seek certain exemptions from federal regulators from some of the consumer consent requirements under limited circumstances. Simply e-translated, consumers still need to read the "fine print," even if it's contained in a Web contract.

Additionally, the measure will allow companies to replace paper records with e-records but permits that regulators to will define document integrity standards to insure against e-fraud. The Electronic Signatures in Global and National Commerce Act is scheduled to take effect in October, apart from the e-record-keeping provisions of the measure, which remain to be established.

Some industry experts have expressed skepticism about how quickly e-signatures will be embraced by the broader marketplace.

Real concerns about the virtual world
The law is still generating strong warnings from consumer groups who contend it could harm a naïve online community. In attempts to protect the consumers, two issues generate the most concern.

The first is that consumers might be forced to accept e-contracts and e-warranties that are less detailed or less favorable than their paper equivalents because they don't understand what "opt-in" means. But companies have been confusing consumers since commercial trade began, and its ridiculous to think that businesses would endorse different standards for regular and e-mail correspondence.

The second is that e-signatures may be more easily forged or stolen than paper identities, leading to an explosion in identity theft and e-fraud. The opportunity for easy money always attracts a criminal element, whether it's blacktopping schemes or fraudulent Internet service bills, the legislation does not change the human condition.

Nonetheless, consumer advocates did approve the law in a compromise before the House-Senate conference, prior to Senate approval.

What remains to be seen is the potential cost-cutting effects the law is designed to have on businesses. In the short term, companies will need to expend monies to build secure systems for correspondence and record keeping.

In the long term, consumers will choose whether to make the e-signature systems a daily routine of the American economy. Only when everyone embraces them can the vision of a paper-free commerce for the masses be fulfilled.

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