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ESIGN Act: Adding eBills to eDocument Service

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Question: 
We are adding ebills to our edocument service. If a customer chooses to receive an e-bill for their mortgage, all other accounts will be converted to e-statements as well. Is this considered a violation of the ESIGN Act as the customer is only signing up for the mortgage bill?
Answer: 

You're worried about the wrong law. The ESIGN Act is permissive, has no penalties, and only becomes an issue when:

a. you want to substitute electronic documents in place of paper documents, and
b. the documents contain disclosures required by federal laws and/or regulations, and
c. the federal laws/regulations requiring the documents also require that they be "in writing."

You haven't said what's included in an "e-bill for a mortgage", what types of accounts are included in "all other accounts", and what's included in e-statements for each of those account types. Without these details, no one can tell you whether or not there may be a violation of anything.

Fortunately, it's not difficult to assess your own situation. You will need samples of all documents your "e-document service" can generate. Print these documents on paper and proofread each one. When you encounter content that is required by any federal law or regulation, highlight that part of the document. This will include boilerplate notices, dollar amounts, dates, percentages, and anything else that is there because a federal law or regulation says it must be there. In each case, look up the part of the law or regulation that requires the highlighted content and determine the format requirement. You are only concerned about those items that must be "written" or "in writing." If you do not deliver these items "in writing", then you violate the laws or regulations that required them and you face whatever penalties are prescribed by those laws and regulations.

If "all other accounts" include deposit account and credit card statements, then Regulations E, Z, and DD are included on your list of concerns. There may be other laws--it all depends on what you find and highlight.

How do you deliver a document in a manner that counts as "in writing"? Before 2000, your only option was printed paper. ESIGN now gives you a second choice--but only if you follow the disclosure/opt-in steps prescribed by ESIGN. 15 USC 7001(c)(1) lists these pre-consent disclosures and subsection (c)(1)(C)(ii) requires a "test drive" so you and your customer have "demonstrated" that the customer has the hardware, software, and savvy necessary to receive, open, and read the documents (e-statements) you will deliver electronically. It's important to note that subsection (c)(1)(B)(ii) allows you to designate "categories of records" that will be subject to a single consumer consent. By listing the "all other accounts (that) will be converted to e-statements as well", you can accomplish what you want. The only rub is customer service. An all-or-nothing approach may not please customers who want some communications on paper and others by electronic means.

First published on BankersOnline.com 11/19/12.

First published on 11/19/2012

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