Fraud Forms and Esign Act

Posted By: Community Banker

Fraud Forms and Esign Act - 01/28/21 08:58 PM

Our operations department would like to begin sending VISA fraud dispute forms to our customers electronically. I believe that this still requires compliance with the Esign Act. I’m getting some pushback on that and would like to know if I am on base or missing it entirely. Thank you in advance for your help.
Posted By: BrianC

Re: Fraud Forms and Esign Act - 01/28/21 09:16 PM

There are two components to ESIGN. The first simply establishes that an electronic signature has the same legal weight as a wet signature. The second requires the ESIGN disclosure and demonstrable consent to receive required disclosures and statements electronically.

A VISA fraud dispute form is not a required disclosure or statement so sending these via email is fine. (However if they contain sensitive information like names, account numbers, etc. I would make sure they are sent encrypted.)

The only written requirement to the Reg E process is that you must provide a written notice if you conclude that no error occurred in 1005.11(d). Without the ESIGN hoops, this notice would have to be snail mailed.
Posted By: Andy_Z

Re: Fraud Forms and Esign Act - 01/30/21 05:01 PM

I would consider this question from a future perspective. I agree with Brian and I would recommend using E-SIGN compliant procedures if you have the capacity. Essentially, I would include Reg E in your E-SIGN agreement if you are using E-SIGN already and you are covered. If it isn't in there, make it so. The more you include in your E-SIGN agreement the better because it allows you to react quicker when there is a need and an ability on the consumers part. Without E-SIGN you could send non-federally required disclosures, but if someone then slips up and sends a federally required form without E-SIGN in place, you have a problem.

Also remember that the E-SIGN hoops like demonstrable consent are consumer protections. Commercial customers do not have that requirement.
Posted By: Valley girl

Re: Fraud Forms and Esign Act - 01/30/21 05:41 PM

Does the esign hoop work both ways? If a consumer emails us a dispute, do we have to provide provisional credit, or would they have to snail-mail the notice to us for it to count as a signed? We normally handle this through esign, but from time to time a member will email our "contactus" and not respond to requests to esign a dispute form.
Posted By: BrianC

Re: Fraud Forms and Esign Act - 01/30/21 06:37 PM

Since an electronic signature has the same legal standing as a wet signature, I consider an email notice of error to quality as notice in writing and provisional credit would be required.

A customer does not have to provide demonstrable consent here because they are sending to the email to you, not receiving a required statement or disclosure from you.
Posted By: Richard Insley

Re: Fraud Forms and Esign Act - 02/01/21 06:26 PM

The "demonstrable consent" requirement applies only to-
a. recipients of e-documents, who are also
b. consumers.

A bank (or entity) can be a recipient, but it can't be a consumer.
Posted By: Valley girl

Re: Fraud Forms and Esign Act - 02/01/21 07:50 PM

Thank you Richard and Brian!