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#1437527 - 09/01/10 03:46 PM eStatement eDelivery Verification
Drex Offline
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We currently have eStatements for customers and in the past we would get their email address and turn it on. The next month when the notification email message was sent out (saying their statement is available) – if the email was returned to us we knew it was wrong and would fix it/remove it/etc.

We were recently audited and were told for ESign requirements we need to verify the email address quicker, send them a PDF (so they can verify they can open it), and that they respond back (via email, the website,…) stating they received it and were able to open it. Our current core processing doesn’t come close to offering a service like this. We may have to do it manually, but I wanted to see if any other bank is doing something similar and how?

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#1437687 - 09/01/10 05:50 PM Re: eStatement eDelivery Verification Drex
Andy_Z Offline
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What you are describing is demonstrable consent. Do a search on that and see tons of hits.

If you are not verifying this when you initiate e-statements for your customer, you have e-sign problems that must be resolved. You can't just turn in on and let it go. You also can't require e-statements when you are making other required-written disclosures in them.
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#1438594 - 09/02/10 08:28 PM Re: eStatement eDelivery Verification Andy_Z
BetsyS Offline
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We are getting ready to roll out eStatements, and have been struggling with “Demonstrable Consent” process and various options available through our vendor. We’ve come up with a process we think will suffice, but have not found a similar scenario in the BOL posts we’ve read, and would welcome some input.

Our eStatements will be in PDF format. When the customer enrolls online, the enrollment “accept” button is not activated until after they’ve clicked on a link to our Disclosure, which is also in PDF format. Once they exit the document, they can click on “accept”.

Ok so far, they’ve demonstrated that they can open a PDF. Our concern is that if they are unable to view the PDF, the “accept” button is still activated when they exit. Would adding a statement similar to “By clicking on ‘Accept’, I certify that I have read and agree to the Terms and Conditions of the eStatement Disclosure” cover our bases for Demonstrable Consent?
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#1438721 - 09/03/10 03:50 AM Re: eStatement eDelivery Verification BetsyS
Richard Insley Offline
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No. That's a declaration, not a demonstration...and I don't see how you can know that the customer can open a PDF file. All you've proven is that the customer can click on a link or two.

In order to patch up your process & get the ESIGN seal of approval, put a code of some description inside the test PDF document. To pass the ESIGN test, require the customer to type the code number or word into a form on the signup page. When the signup page is submitted with a correct code in the form, the customer has demonstrated his/her capability to access and use documents of the type you will use for "live" e-deliveries.
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#1438924 - 09/03/10 03:22 PM Re: eStatement eDelivery Verification Richard Insley
BetsyS Offline
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Thanks so much for the reply, Richard. That was exactly our concern. We're going back to our vendor.
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#1448412 - 09/24/10 11:48 PM Re: eStatement eDelivery Verification BetsyS
BetsyS Offline
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We have found a work-around to our consent process, but have referred the issue back to our vendor’s compliance and legal department. We received a response from them citing E-Sign section 101, 2, B (3) which states:

3) EFFECT OF FAILURE TO OBTAIN ELECTRONIC CONSENT
OR CONFIRMATION OF CONSENT.—The legal effectiveness,
validity, or enforceability of any contract executed by a consumer
shall not be denied solely because of the failure to
obtain electronic consent or confirmation of consent by that
consumer in accordance with paragraph (1)(C)(ii)

In their opinion, this section provides adequate protection should a customer take an FI to court based upon the way they enroll for eStatements.

Has anyone encounter this position before?
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#1448414 - 09/25/10 01:15 AM Re: eStatement eDelivery Verification BetsyS
Kathleen O. Blanchard Offline

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My response to something like this is that this should be a defense in court, not a plan of action.
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#1448421 - 09/25/10 10:39 AM Re: eStatement eDelivery Verification BetsyS
Richard Insley Offline
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This section is irrelevant. The issue under discussion is NOT the validity of a contract--but rather the delivery "in writing" of the disclosures required by Regs. E, DD, and possibly Z (if you're e-delivering statements for open-end credit accounts.) Your biggest risk is enforcement action by your regulator, not consumer lawsuits. When testing your compliance with Regulation E, I doubt your regulator will excuse your vendor's system-design inadequacy. And...let's say you get lucky and dodge the first bullet...what do you do after that? You can no longer say the design defects resulted from a misunderstanding, so you'll have no choice but to correct the process. Why plan to use an excuse? Like KB says, why don't you just do it right the first time? In the long run, it's always cheaper to do something right the first time.
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#1448422 - 09/25/10 11:41 AM Re: eStatement eDelivery Verification Richard Insley
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You could also read that section to say that if a consumer sues a company over a contract that was suppose to have been e-sign compliant, the company cannot use the excuse that the contract is not valid because the company failed to follow the law. I would not want to hang my hat, being in the company's shoes, on this paragraph.

Oh, and I totally agree with Richard on all his points, as those are probably the greater of the risks. The day you start relying on your vendor's legal department, is usually a bad day for the bank. Do you think they are not going to skew their response to support their business model. If they say, we have a product, but it is not e-sign compliant, how long would they be in business?
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#1449400 - 09/28/10 09:31 PM Re: eStatement eDelivery Verification rlcarey
Andy_Z Offline
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Think about this, why do you want to try and work around a requirement and not meet the requirement. Why do you want to invite a class action case because you turned a blind eye to the requirement and accepted that in the opinion of someone who wanted to sell you something, you could ignore state requirements. This makes no sense.
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#1449414 - 09/28/10 10:05 PM Re: eStatement eDelivery Verification Andy_Z
BetsyS Offline
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Actually, our work-around is so that we can comply with eSign. The response from our vendor is non-commital as to whether they agree with us or not from a compliance perspective; just the legal citing. They have indicated that they will be reviewing our request for changes to their process, but it will take time.

Thank you all for your responses; I whole-heartedly agree with them, which is why this is so frustrating. We do not want to wait to address it in a regulatory audit or in the court room.

I'm curious as to whether this has come up for anyone in a recent compliance audit, and if so, which agency.
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#1449441 - 09/29/10 02:12 AM Re: eStatement eDelivery Verification BetsyS
Richard Insley Offline
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Maybe the legislative history will help you and the vendor design a procedure that meets the letter and spirit of ESIGN.

The bill that became ESIGN was supported by cost-conscious businesses but attacked by consumer activists because (like the UETAs) it did not require positive confirmation of receipt of each e-delivered document. Obviously, businesses that wanted to switch from paper to e-documents DID NOT want to be saddled with the responsibility to monitor every e-delivery for a consumer receipt. If that idea had stayed in the bill, no one would be doing e-delivery today because it would be too cumbersome and expensive. In order to get the bill passed, the parties struck the compromise that we've nicknamed "demonstrable consent." Rather than affirmative receipt for each e-delivery, the compromise calls for a single confirmed receipt at the time the e-delivery arrangement is set up. Still concerned that consumers could be forced into an agreement beyond the consumers' technological capabilities, the compromise requires a handshake-style interaction between the parties that demonstrates the consumers' technological capability.
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#1449819 - 09/29/10 06:45 PM Re: eStatement eDelivery Verification Richard Insley
BetsyS Offline
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Thank you Richard. We will be sharing your information with them.
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#1450890 - 10/01/10 07:00 PM Re: eStatement eDelivery Verification BetsyS
Derwood Offline
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I was asked if “Demonstrable Consent” applied to business accounts as well. We would only be enrolling those business that request estatements. My first inclination was that it does not because the disclosures for Reg E, DD & Z only apply to consumers, but would appreciate any feedback on this. I am with the same institution as BetsyS so we do not currently have a way to prove demonstrable consent from our vendor.
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#1451008 - 10/01/10 08:42 PM Re: eStatement eDelivery Verification Derwood
Richard Insley Offline
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Unless state law requires paper statements (very unlikely), you're free to do whatever you and your commercial customers agree. Contract documents and other material that does not contain federal disclosures can be handled under your state's UETA.
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#1518510 - 03/07/11 11:54 PM Re: eStatement eDelivery Verification Richard Insley
river girl Offline
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We are switching vendors for our credit life and disability product coverage. For our existing consumers with coverage, we will be sending a new insurance certificate from the new vendor.
For consumers with paper mail, we will mail the certificate and that is all the vendor is requiring - no acknowledgement from the consumer is required.
However for the consumer with electronic statments, we will have them sign on to homebanking (multi factor authentication) and then the link to the new certificate will appear. The vendor is saying we have to be able to prove the consumer opened the link.
They are saying this requirement to prove the link was actually opened is a requirement of ESign and UETA.
First off, we are in Washington state and I don't think UETA was ever passed here. Is this a requirement of E-SIgn?I can't locate it.

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#1518523 - 03/08/11 12:33 AM Re: eStatement eDelivery Verification river girl
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Your e-sign agreement and demonstratable consent using the delivery method for this document would have to have covered this certificate for this to be viable.
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#1519135 - 03/09/11 05:00 AM Re: eStatement eDelivery Verification river girl
Richard Insley Offline
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Does state law require that this insurance certificate must be delivered to insured borrowers "in writing"?
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