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Can I Accept a Facsimile Signature as an Original?
Answer by John Burnett, BOL Guru
Guru BIOS
Question: Can we accept facsimile signatures as the original signature? What regulations do I need to be aware of when considering accepting facsimile signatures as the original signature? I haven't been able to find anything definitive that says that we can/cannot do this.
Answer: Accepting facsimile signatures can be risky both for the bank and for its customers. But facsimile signatures are perfectly legal if selected by the customer and approved by the bank.
Customers using facsimile signatures must be aware of the need to control access to the facsimile stamp or file (if electronic). Security needs to be higher to prevent unauthorized use of the signature.
Banks that accept facsimile signatures should consider including exculpatory language in their account contracts such that the bank is protected should a facsimile signature fall into the wrong hands or otherwise be compromised. They should insist upon language shifting the onus to the customer for notifying the bank if the signature is stolen, missing or compromised, and making the customer liable for all use, irrespective of authorization, unless the bank is notified of compromise.
First published on BankersOnline.com 10/18/04
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