eSignaure Law

How to Improve Customer Experience with Esignatures

How to Improve Customer Experience with Esignatures

Customer service is an opportunity to exceed your customer expectations – John Jantsch

Did you know that investing in customer experience initiatives has the potential to double your revenue in 36 months?

Don’t be surprised!

Another research by American Express found that 86% of customers are willing to pay more for a better customer experience (CX).

What is customer experience (CX)?

Is it about offering freebies, rewards, coupons, or heavy discounts to make a customer happy?

Not at all! – it is more about self-motivating the customer to do business transactions with the brands in speedy and convenient manner.

So, let’s redefine customer experience, which is “Creating an emotionally satisfying, positive experience with your brand or business, that leaves the customer feeling happy and satisfied that they did business with the brand.”

Why is customer experience important?

We all know companies have everything – the latest technology, lavish showrooms, the costliest hardware & products in the world to attract a customer.

But is it sufficient to build a lasting bond with the customer?

Did we forget an essential ingredient?

Yes!

Sometimes companies stop conveying human emotions connected with customer experience.

An excellent customer experience can be due to multiple reasons found helpful by a customer like helping finalize a product quickly, offering excellent competitive pricing for the products, or exceptional after-sales service to make a customer happy.

A positive customer experience:

– Increases brand loyalty

– Improves brand image

– Better customer engagement

– Boosts organic business growth

– Helps stand out in the competition

– Ensure positive word of mouth publicity

Improving customer experience with electronic signatures

eSignatures significantly improve customer experience by providing blazing fast access to customer services like esigning documents, KYC, customer approvals, Tax return filing, legal services, HR services, and many more. They are popular in the industry for their speed and simplicity. As for businesses, they reduce paperwork, cut short the time in signature and approval of the contracts, workforce hiring, limit purchases of printing devices, and storage of physical documents.

So, how do eSignatures improve customer experience?

  • No more waiting time to access services

According to a study, eSignatures reduce the average document processing time from five days to 37 minutes.

If you want to purchase a mobile sim, apply for a banking loan or sign a crucial document, you don’t need to sign a physical document and wait for weeks or more for the company’s confirmation and access to these services.

You get instant access to the needed services by signing in electronically from your own trusted device and complete the service formalities in no time. The application is instantly verified and accepted by the company. You get full access to the applied services the same business day. Apart from this, it saves you from the lengthy hassles of printing the application & identity document, self-attesting, and mailing it to the company for verification and confirmation.

  • Fully secure to use

Using a physical document for daily business activities brought in many issues like managing, storing, and keeping it safe from getting stolen or forged for misuse. There were frequent cases of the stored documents getting lost or leakage of the customer details.

In contrast, the esignature technology does document management systematically as all your documents are present in the cloud, with no chances of confidential data getting leaked or lost. You can share the document within or outside the professional network safely and securely.

Is eSigning a document safe?

An eSignature solution uses

  • Advanced Electronic Signature (AES) to ensure protection against forgery
  • 256-bit HTTPS advanced encryption is complicated for hackers to breach security

These eSignature security measures confirm that no one is spying on your connection.

Customers or businesses can fully trust esignature solutions to sign online contracts securely, initiate service or key announcements without doubting the source and authenticity of the signed document.

Ensuring a secure business environment helps reinstate customer faith in a brand, encouraging them to do more business transactions without the fear of their identity or confidential data getting stolen for misuse.

  • It helps track your documents

Physical documents are challenging to track. You have to constantly follow up with different stakeholders in the company or with new partners or clients on phone calls, emails & physical visits to know the signed documents’ status and remind other people who have still not signed it.

eSignature helps you make this task easy. Here is how you can easily track and esign the documents using LunarPen

  • Create or upload a document
  • Add signers’ email to decide who receives the document
  • Use LunarPen app to add eSignature box, date & time
  • Send the document for eSignature
  • Use the LunarPen interface to eSign your document
  • Track your document online

Now, no more wondering where the documents are, no more chasing them down, and no more delays. You can track the live status of your documents anytime.

  • Enables self-service for faster response

Customers want a solution for their problems, and they want it fast. The most important attribute of customer experience is fast response time.

How can you respond faster to a customer?

By customer self-service. Do you know that more than 40% of customers prefer self-service over human contacts?

In 2021, self-service is not a choice. It’s an absolute necessity.

It empowers your customers to explore service and find answers on their own.

How eSignature provides Self-servicing benefits to customers in 2021?

  • Faster service: You don’t have to rush to the printer & mail department for printing-scanning-mailing the physical document. One single tap on the eSignature app lets you speed past the create-sign-email cycle in minutes.
  • Less room for error: Even well-trained, experienced professionals make errors in creating and signing a document. When you use eSignature solutions, you create online documents with a lesser probability of mistakes in a shorter time.
  • Customer Satisfaction: As you use eSignature apps on your own, it gives you total command, confidence, and satisfaction in knowing, experiencing, and using the app features.
  • Simplify and modernize the sales process

A traditional purchasing process involves showing multiple product options to the customer. Based on the customer choice, a contract or agreement is worked out between the customer and the business to supply the product and complete the sales process. It is a lengthy process where many terms and conditions are negotiated & renegotiated between the parties before signing the actual agreement.

It’s time to modernize the purchase process!

What if you get a customized agreement, mutually agreed by both parties, without the stress of paperwork?

An eSignature solution helps you eSign the contractual documents instantly using digital devices. You don’t need to travel to sign a document, plus you get a super thrilled and delighted customer impressed with the speed and experience of the digital purchase process. It significantly improves the customer experience as they get the privilege to use the latest technology to execute essential business operations.

Case Study

Amway utilized the speed and efficiency of eSignatures to register new distributors for its products and increase revenue in European markets.

Challenge

The biggest challenge to expand in the European markets was to acquire new independent distributors. As a part of the process, contracts were printed, signed, and sent to prospective distributors for review and then sent back to Amway.

However, multiple contracts were returning to the company with missing information and signature. Returning a document without a signature meant a lot for the company, which meant that contractual terms were not acceptable to the distributor. In that case, the contract had to be sent back to prospective distributors for confirmation again. Apart from this, several agreements were lost in the mail, forcing the company to restart the contract process from scratch.

The manual process wasted a lot of business time, created confusion, and increased loads of manual paperwork.

Solution

Amway decided to change the distributor onboarding model from offline to online model using the esignature solution. It made the contractual signing process faster as distributors got the flexibility to sign contracts on the move using a mobile device.

The expectation from the eSignature solution was to increase the number of signed contracts with the distributors, boost company visibility, revenue, and brand image in the market.

Results

In the first year of deployment, the company signed contracts with 90,000 new distributors.

Results were mind-blowing:

– Improved registration experience for Independent Amway distributors

– Contract completion improved from weeks to seconds

– 50% reduction in administration

– Lowered distributor attrition during registration

The simple, intuitive process gives new independent Amway distributors a positive first impression and significantly reduces the number of potential distributors and prospects leaving the company.

Conclusion

eSignature is a valuable digital tool to boost customer experience and plays an undeniable part in the customer journey to transform a new customer into a qualified lead to generate a sale.

Our suggestion for businesses is to work on a dedicated customer experience strategy that will satisfy customers and turn them into advocates for your product.

At LunarPen, we help businesses build customer trust and loyalty using eSignature solutions.

SIGN UP for a FREE account to make eSignatures an integral part of your business strategy.

Frequently Asked Questions

How can digital customer experience be improved?

One can improve digital customer experience by following these steps:

  • Deep dive into the customer journey to gain insights
  • Observe and analyze customer behavior
  • Check user feedback through multiple channels
  • Gather important suggestions by the customers
  • Try to implement actionable suggestions
  • Focus on self-service to enhance customer experience
  • Take feedback from the customers after changes

How do you measure KPIs for customer experience?

It would be best if you used these KPIs to measure customer experience:

Net Promoter Score (NPS): It consists of two questions and gives only one customer experience-related number needed by the company to know the customer satisfaction level.

Customer Satisfaction (CSAT): It uses a scale from 1 to 5 to know customer satisfaction. 1 Star means the lowest, and 5 star means the highest.

Customer Effort Score (CES): It has different answers to judge customer experience starting from Very difficult, difficult, Neither, Easy, Very Easy.

Churn Rate:  It shows the number of lost customers that have stopped using your product or services.

Retention Rate: It is a measurement of how a business retains customers over a period of time.

Customer Lifetime Value (CLV): It shows the total amount of money a customer would spend on a product or service during their lifetime.

How do clients sign contracts electronically?

You need to follow these easy steps on LunarPen App to sign contracts electronically:

  • Upload the document from a device or cloud storage
  • Add email ids if you want the signature of other people
  • Add eSignature text box, date, time, and further details in the document
  • eSign the document using a smartphone, tablet, laptop, or other devices
  • Email the document to the recipient

What are the four main areas of digital transformation?

A CEO should focus on these areas of digital transformation:

  • Employee Empowerment
  • Customer Engagement
  • IT infrastructure modernization
  • Innovation of products and services

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eSignature Laws

eSignature Laws

Do you know electronically signed documents have the same legal rights due to valid eSignature laws in comparison to the documents signed by a ball pen? Despite this, people suspect if they are permissible by law and are hesitant to use esignatures because they believe it can be forged, misinterpreted, and copied quickly. The hard reality is handwritten signatures can be easily duplicated using different methods adopted by fraudsters like simulation, tracing and freehand. In contrast, electronic signatures have many security and authentication layers to protect the esigned documents along with court-admissible transaction proof backed by the law.

The popularity of esignatures has risen since the year 2000 as world powers have put them on par with handwritten signatures by introducing laws making them legitimate.

To recognize the enforceability of e-signatures:

– India recognized esignatures under the IT Act
– USA recognized ESIGN and UETA
– EU recognized eIDAS Act

Let’s look at the esignature legality in these countries of the world

INDIA

In India, the Information Technology Act 2000 grants the same legal status to electronic and digital signatures as handwritten signatures in Indian law.

Electronic signature

Defined under Section 2(1)(ta) of the IT Act, 2000 as “Authentication of any electronic record by a subscriber using the electronic technique specified in the second schedule and includes a digital signature.”

Chapter III Electronic governance of the IT act grants legal recognition to electronic signatures and electronic governance.

Digital Signature

According to section 2(1)(p) of the Information Technology Act, 2000, a Digital signature means “authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3”

Section 5 of the Information Technology Act, 2000 gives legal recognition to digital signatures.

Chapter V of the IT act provides these details about securing electronic records and electronic signatures.

Secure electronic record: Where any security procedure has been applied to an electronic record at a specific point of time, then such record shall be deemed to be a secure electronic record from such point of time to the time of verification.

Secure electronic signature: An electronic signature shall be deemed to be a secure electronic signature if –

  • the signature creation data at the time of affixing the signature was under the exclusive control of signatory and no other person.
  • The signature creation data was stored and affixed in such an exclusive manner as may be prescribed.

In case of digital signature, the ―signature creation data means the private key of the subscriber.

How to know if an esignature is valid in India?

Under the IT Act eSignature law, an electronic signature must meet the following requirements to be deemed accurate and lawfully valid:

  • An electronic signature must be unique for each signatory.
  • The signatory must have control over the data used to produce the electronic signature when signing.
  • Any tampering with the affixed electronic signature or the document must be detectable.
  • An audit trail records all the steps taken during the signing process
  • A certifying authority (CA) must issue the signer certificates authorized by the Controller of Certifying Authorities under the IT act

eSignature IT Act impact on business

Saved up to 1.3 hours per transaction in preparing, reviewing & negotiating documents

  • Improved document security & reduced time spent on documents from hours to minutes
  • Faster sales cycles with ready-made templates & document tracking features
  • $11 cost saved per transaction after switching to digital signature
  • Massive reduction in operational expenses by the banking sector

USA

The ESIGN Act was declared a law on 30 June 2000 and defined electronic signature as an “electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record”.

The most significant takeaway for contract compliance is that the signature’s electronic representation must be aligned with a contract or other document and adopted by the signatory, by any act, with the intent to be bound.

Following federal preemption, ESIGN law allows esignatures in all fifty US States where the federal law applies. It means it affects people who do online business in these states. The regulation applies both to electronic signatures and electronic records. If the federal government’s law does not apply, every State has electronic signature laws, most of which follow the UETA act.

The UETA Act centres exclusively on electronic business, commercial and government contracts. Compared to the ESIGN law adopted by the US states, the UETA act followed a state-by-state basis. Every State has the power to accept or reject the guidelines present in the act. If there is a conflict between ESIGN and UETA Acts, then the state law is abidable. Right now, forty-seven states adopted UETA, excluding New York, Washington, Illinois, Columbia, Puerto Rico and the Virgin Islands.

How to check compliance with these Acts?

  • There must be explicit consent to do business electronically
  • Electronic signatures are valid only if parties intend to sign
  • An electronic signature must be associated with the signed document
  • The electronic signature must be attributable to the person signing the document
  • An esigned document must be in the form of an electronic record that the recipient can retain at the delivery time.
  • Presence of checks and measures to know if the document has tampered

Impact of ESIGN Act on businesses

  • Revolutionized the real estate industry by eliminating clunky transactions & customer pain points
  • Armed with electronic signature on tablets, field sales executives observed a 50% reduction in the average no of meetings to acquire new customers.
  • HIPAA compliant eSignature in the healthcare industry made it easy to manage patient records

Impact on the banking industry

  • Reduced the application time from 8 days to 24-48 hours
  • Annual scanning and imaging costs decreased by $1 million
  • 90 per cent reduction in document errors
  • 80 per cent of document handling costs eliminated
  • The entire workflow reduced to just 4 steps
  • Manual back-office operations no longer required

European Union (EU)

The eIDAS act (electronic IDentification, Authentication and trust Services ), also known as Regulation (EU) No. 910/2014 is established by the European Commission to achieve a Digital single market.

It recognized three signature types as electronic signatures, Qualified electronic signatures, Advanced electronic signatures and defines

electronic signatures are “data in electronic form attached to or logically associated with other data in electronic form.”

A qualified electronic signature is an advanced electronic signature created by a suitable electronic signature creation device based on a qualified certificate for electronic signatures.

An advanced electronic signature means an electronic signature that meets the requirements set out in Article 26 of the eIDAS Act.

The purpose of this eSignature law is very clear from the first paragraph of the act “Building trust in the online environment is the key to economic and social development. Lack of trust, in particular, because of a perceived lack of legal certainty, makes consumers, businesses and public authorities hesitate to carry out transactions electronically and to adopt new services.”

The regulation seeks to enhance trust in electronic transactions by providing a common foundation for secure electronic transactions between citizens, businesses and public authorities to increase the effectiveness of private and public online services, ecommerce, online companies in the European Union.

How to check compliance with eIDAS Act?

Electronic signature: The electronic signature must be

  • Applied by the person associated with the signature
  • Involved in a manner that demonstrates the intent of the signer
  • Associated with the document or data the signer intended to sign

Advanced Electronic Signatures (AES): It must

  • Be uniquely linked to the signer
  • Identify the signer
  • Be under the sole control of the signer
  • Detect changes to the data after the application of AES

Qualified Electronic Signature: It must be

  • Created using a QES creation device
  • Supported by a qualified certificate

What does the eIDAS Act mean for businesses in the EU?

The growing use of electronic Identification schemes (eIDs) will save EU businesses worth 11 Billion Euros every year. It also benefits industries throughout the EU.

Financial Sector: One of the biggest beneficiaries of this act is the financial sector allowing eIDs and trust services to use KYC for quick onboarding of the customers. Thanks to eIDAS solutions, all processes are done online in a highly secure manner.

Retail Sector: Examples of how the online retail sector uses eID and trust services:

  • Customers buying restricted or high-value products use eID for thorough identification tests.
  • eSignatures & etimestamps save money by streamlining the processes improving document tracking.
  • Use of certified website authentication certificates to increase consumer confidence in online retail websites & prevent data phishing.

Transport Sector: Examples of how the transportation sector used eID and trust services:

  • Customers use eID and trust services to prove their identity, provide a safe log-in to the service
  • eTimestamps highlight transparency where several carriers are involved
  • Use of eSeals on essential documents to verify their origin & integrity while reducing reliance on paper-based documents

Lunarpen eSignatures comply with all eSignature laws with strict protection and authentication standards. It is legally valid for doing all online business transactions safely and securely.

SIGN UP Now to be a part of LunarPen family.

Conclusion

We have observed and understood eSignature laws in all of these countries. If we notice, the meaning and usage of electronic signature laws are altogether the same in every part of the world. These laws are designed with only one thing in mind- to make life easier for people, cut short the steps in manual processing of services, increase digital adoption, and ensure faster alignment with everyday activities supporting tremendous business growth. eSignature laws are the stepping stones to digital transformation- your gateway to a limitless world.

Frequently Asked Questions

Are electronic signatures legally enforceable?

Electronic signatures are valid in India, the US & other major countries of the world as eSignature laws are enforceable in the form of the IT Act, ESIGN Act, eIDAS Act, and a lot more. These laws are responsible for making eSignature valid in each of these countries.

What is the law on electronic signatures?

Every country has its eSignature law clarifying the definition and usage of electronic signature and digital signature. You can read the above for detailed information about different eSignature laws.

Is LunarPen eSignature legal in Europe and US?

LunarPen eSignature is fully compliant with the eIDAS regulation in Europe and the ESIGN Act in the US, making it legal to do business and online transactions in both of the countries.

Is an electronically signed document legal?

As per the different eSignature laws in the world, an eSigned document is legal if it meets the defined conditions described in each of the laws.

What constitutes a legal electronic signature?

A legal electronic signature must have evidence of the signer’s intent and consent to sign the document. This is made possible if the subscriber takes positive action such as using an ePen, Smartphone, Tablet, mouse, or a keyboard to create the eSignature and electronically sign the document.

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Top Business Challenges Solved by E Signature

Top Business Challenges Solved by E Signature

Creating, signing and organizing physical documents are a never-ending task. All of us have been through the time-consuming process of mailing and retrieving hard copies of vital documents such as applications and contracts that include your actual handwriting signature. If copying, mailing, and using multiple paper sheets with separate copies weren’t bad enough for the world and the environment, imagine what would be. In that case, the business is also extremely risky and vulnerable in terms of the authenticity of those signatures.

Since the conventional contract signing process is both time-consuming and expensive for the firms and the customers, Electronic signatures, which substitute traditional signatures on paper, are being proposed or adopted by a growing number of businesses.

An electronic signature solution has the power to change the way you conduct business and pave the way for improved profit and creativity.

Discover these top business challenges that you can solve with esignatures.

These days’ people are unwilling to wait even for a minute to get things done. They instantly want results in their hands after making payment for the business solution. Modern business practices help deliver quality products on time securely without compromising on the customer experience.

Here are the expectations from modern business practices:

–         Speed

–         Security

–         Authenticity

–         Easy usage

–         Reduces the process steps

–         Provides a competitive advantage

–         Eliminates physical presence of a person

eSignatures complement modern business practices in a big way as they are easy to integrate seamlessly into organizations’ existing business processes. You don’t need to dust off your printer cum fax machine to copy and scan the documents or send someone around the town to sign a stack of papers.

Say goodbye to all the manual delays and errors in creating, editing, authenticating, and signing the documents. By using eSignature apps, businesses can complete their contract deals quickly and safely by going online.

  • Document Traceability:

You get a call from the top company management to find out the details of a particular document. Finding that one document in a pile of thousands of documents is an arduous task and a sheer wastage of employee productivity, potential, and business hours.

What if you could find the required documents in a matter of a few seconds without involving your employee?

eSignature helps you trace and ensures transparency, reliability, and evidential validity of your paperless records deposited in secure cloud repositories without having to sweat or divert your attention away from your primary task.

Choosing the correct electronic or digital signature solution means that you and your clients can email, accept, and monitor documents by notifying them when the recipient opens and signs the documents. As a result, both parties will go ahead with the business deal’s execution in no time.

  • Enhance Security:

Using electronic signatures removes the need to chase piles of paper and ensures enhanced security for the signed documents as one of the critical elements of using esignature is the ability to prove the signing party’s identity. You cannot use an electronic signature app without verifying your identity. In the case of a contract or agreement, it also shows that both parties agree by the esigned contract.

The eSignature app lets you keep track of the identity of the person accessing & reading the document and instantly notifying whenever the verified receiver signs it. This additional oversight is essential for the protection of personal information.

Electronic signatures use a digital storage solution backed by data encryption mechanisms, user authentication, and secure repositories to hold contracts which are a better option than storing them in a filing cabinet. It prevents the stored document from getting stolen, copied, getting tampered or damaged due to mishandling.

How can businesses use electronic signature apps more securely?

Businesses can use the e-signature network to deliver documents to various clients for signing. One must assign the document a name on an electronic signature app, upload it, and add signer information. However, before sending the contract to the recipient, you must use text boxes to indicate places on the document that the client must sign with either initials or signatures.

To sign online documents, the customer can use a smartphone or other signature recording devices or apps. When your client has finished signing and clicks the Finish button, the sender gets a message stating that their client has completed the paper signing process.

  • Status of the documents

Now you don’t have to waste time in follow-ups with the customer for knowing the document clearance status. The dilemma stage to speak, call, remind, communicate, schedule or reschedule a meeting with the customer for signing the document is over.

Using an electronic signature or a digital signature, you quickly track if the client or the customer has signed the document or is still pending.

The document status monitoring feature is helpful for business users who have hectic schedules. Furthermore, you can check where each document is in the signature process at any moment.

signature proces

  • Improving speed:

The manual process of gathering signatures is a daunting task. You must run from door to door to meet the clients and seek their appointment for signing the documents. Sometimes you may even have to waste an entire day waiting for the client. It affects employee productivity in a big way as other prioritized tasks take a backseat.

On the other hand, an electronic signature solution helps you to circumvent the inefficient download-print-sign-scan-email loop. Without ever leaving the submission, you can receive the signature in seconds and the paperwork returned to the requester. Consequently, the turnaround period shortens.

  • Customer Experience

96% of customers say customer service is vital in their choice of loyalty to a brand.

Companies that excel at customer service have 1.5 times more committed staff than less customer-focused companies. Employee participation improves by 20% on average in businesses that enhance their consumer service.

90% of CEOs agree the customer has the most significant effect on their company.

How electronic signatures improve customer experience?

eSignature allows you to:

Simplify the purchasing process:

The consumer signs the contract using electronic signatures as soon as they agree on your product or service, without any delays or waiting.

Customer loyalty skyrockets when they save hefty travel costs and do not have to fly to sign a contract, mail signed documents back, or print and scan a signed document to deliver by email.

They can log in to the esignature app in seconds from any computer or portable device online and complete the contract without being physically present.

Modernize the purchasing process:

You meet customers’ digital needs by using electronic signature solutions. Customers have become accustomed to the speed, convenience & safety of digital transactions.

You won’t have to go through any more time-consuming paper procedures for electronic signatures as all formalities are completed electronically in just a few minutes. It projects a new and forward-thinking vision of a business that values its customers’ time.

Conclusion

Electronic signatures are gradually bringing much-needed changes in business processes around the world. They have made daily interactions between businesses, individuals, and public organizations much easier.

It’s no wonder that esignatures are becoming an important part of the digital transformation strategy valuing business collaboration. To achieve a competitive advantage, it is necessary to implement an effective digital transition strategy. However, without an eSignature platform, no digital transformation strategy is complete. The advantages of esignatures include increased productivity and lower costs along with enhanced user experience.

Begin your digital transformation journey by implementing eSignatures today.

Frequently Asked Questions

What are the benefits of electronic signature?

You would be glad to know about these astounding benefits of electronic signatures:

  • Enhanced security for day to day business operations
  • Very easy to use and takes less time to implement
  • Paperless workflow means no need to print-sign-scan
  • Get access to centralized document storage
  • Better workflow tracking with esignature apps
  • Increase collaboration and get projects moving
  • Lower transaction costs due to fewer chances of human errors

Is electronic signature acceptable in businesses?

Electronic signatures, like handwritten paper and pen signatures, are legally recognized, registered, and accepted by companies all over the world. The audit trail, which is linked to the electronic signature, makes it more appropriate in the event of a legal dispute and provide a detailed record of the usage of electronic signature in the documents.

Can a company sign electronically?

Yes, a company can sign a document electronically through an appointed and approved representative.

What documents cannot be signed electronically?

You cannot sign these documents electronically:

  • Wills, Deeds, and Leases
  • Papers for adoption
  • Divorce documents
  • Orders of the Court
  • Notices of termination of work (leases, utility, etc.)
  • Repossession notifications
  • Foreclosure notice
  • An eviction notice
  • Notices of product recalls

How do I verify an electronic signature?

When you get a signed document, you may want to verify the signer and the signed material by validating the signatures.

Authenticity checking confirms that the signer’s certificate and its parent certificates are available in the valuator’s trusted identities list.

Document integrity verification confirms that the signed material has not changed since it was signed. If the content of the document changes, document integrity review confirms if the content changed in a way permitted by the signer.

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How are electronic signatures better than handwritten signatures?

How are electronic signatures better than handwritten signatures?

Companies generate a lot of paperwork! Too much of it reduces your business efficiency, slows down data collection, storage, and retrieval, increases chances of errors, & has security issues. As more and more businesses automate their processes, the need to evolve from a handwritten signature to an electronic signature becomes increasingly crucial, fuelled by customers’ digital presence, demanding the availability of services from anytime, anywhere.

Handwritten signatures are swiftly getting replaced by electronic signatures worldwide due to their ease of use, quick return on investment, time saved on manual processing, speed, security, and verification by governments, banks, and regulatory authorities.

You can see the sharp surge in popularity for electronic signatures compared to handwritten signatures as per the latest trending data from Google.

electronic signatures

Source: Google Trends

So, what makes electronic signatures better than handwritten signatures? Let’s find it out.

Supports Work from Home:

From public transport struggles to global health concerns, sometimes things get in the way of getting to the office and forcing you to remain at home.

How to make sure that your contracts and agreements do not get affected if you work from home?

Now, we live in an era when companies have made work from home compulsory. We look at some of the different ways that electronic signatures help keep your company going forward, no matter where you are or what department you work in.

–         Close deals much faster as you don’t have to rush to the client physically for esigning the document

–         Helps in employee hiring by automating & accelerating the employee agreement process

–         Improves governance by centralizing the storage & management of all signed versions of the documents.

How to use electronic signatures while working from home?

You only need to install the esignature app on your device, connect with other parties to use the same. You would be able to create new documents online by uploading or using readymade templates. After that, you add email ids of signees needed for esigning the document by drawing, uploading, or typing the signature. Finally, you can send the document securely to clients, colleagues and speed up business processes without being present in offices.

Money and Time Savings:

Do you know that an organization spends 15% of its revenue creating, managing & distributing paper files for documentation?

Going paperless and adopting e signatures in a business helps you in so many ways. It restricts resources, workforce, and hardware equipment needed for procuring, printing, scanning, and mailing signed documents. The frees up time, allowing you to focus on essential tasks, saves processing time, and increases business response time, encouraging more cash flow in the industry.

Digital processes help fast-track business transformation by automating document flow, minimizes repetitive tasks to replace the time-consuming processes involved in manual capturing of data, re-entering data on machines, scanning, and storing it. It helps your team serve the customers more efficiently and create memorable experiences for them.

Electronic signatures need fewer resources like ink, paper, and postage resources. They support instant digitization of the business approval process. You don’t need to be in the office to prepare and esign a document. All necessary documents are ready online and forwarded to other signees in the online network. Electronic signatures apps empower you to access and esign a document using tablets, smart phones & laptops. So, you save a lot of time spent getting the document signed and sharing it with respective stakeholders without delay.

Enhanced Security:

A handwritten signature can’t assure you that the original document is signed by a genuine person as fraudsters quickly forge the signatures. Also, it is difficult to identify and authenticate the original signature from the fake ones.

On the contrary, electronic signatures only allow relevant invited parties to esign a document. If an online form needs esignature from other signees, the signer adds the signees’ email ids to access and esign the record on an esignature app.

Here are the details of the secure process of sending a document for esignature with the LunarPen app

  • Receive an email notification to sign a document on the esignature app
  • Go to the email and view the document shared for esigning
  • Verify the identity of the signee before esigning a document
  • Please review the document before signing it
  • Draw, write, or upload the signature
  • eSign the document securely

Electronic Record:

It is not easy to track changes in the document with a handwritten signature.

eSignatures comes with an audit trail feature to track every change in the document and capture details of when the document is opened, changed, viewed, and signed by a verified user. Audit trails maintain system activity and user activity records. It assists in detecting performance problems, flaws in applications, and security violations.

LunarPen audit trail helps you with all the tools to access, edit, send and sign the documents securely using the industry standard 256 bit HTTPS encryption. You can track all the details of the document right from

  • The time on which a user created the document
  • When the signee receives the document
  • When the signee consents to esign the document
  • When other stakeholders receive esigned document

Saves Environment

Around 40% of the world’s harvested trees produce papers. Even though the paper is recyclable, an A4 size paper requires 10 liters of water per sheet and emits methane, a greenhouse gas on rotting. Industry research firm Gartner estimates that as much as 3% of a company’s revenue is spent on paper, printing, copying, scanning, storing, transporting, and maintaining information files. Now you can realize the hidden costs of doing a handwritten signature.

Using an esignature for official work ensures:

  • No chopping down of trees for paper production
  • No paper wastage due to electronic transfer of data
  • Protects natural habitat of animals and earth’s natural biodiversity
  • Minimal usage of natural resources like water for paper production
  • Reduction in carbon footprint as esigned data is accessible from anywhere
  • Reduces electronic waste as you don’t have to buy printing machines

Indestructible Documents

Documents with handwritten signatures are prone to destruction due to mishandling, workplace accidents and can be easily lost, damaged, or forged. This forces the company and its workforce to leave the current prioritized task, trace the document, start every related business process from scratch, and waste valuable business hours.

Electronic signatures give a massive advantage to your business:

  • It is difficult to destroy documents in electronic format
  • Secure cloud servers ensure data is never misplaced
  • eSigned information is challenging to tamper and duplicate

Conclusion

There are many crucial business processes requiring signatures, such as the approval of contracts, invoices, and employee evaluation forms. Handwritten signatures slow down these processes as they are dependent on the exchange of paper and the signatory’s presence. Now you can see why electronic signatures fit better in modern business practices than handwritten signatures. They flawlessly integrate into an organization’s business processes and don’t depend on geographical boundaries and a person’s physical availability. They complement businesses in need of digital transformation, speed, safety, and security. Use the LunarPen to Fastrack and turnaround day-to-day business processes in a single click.

Frequently Asked Questions

Is an electronic signature an original signature?

An electronic signature is just like an original signature done by the signer on an electronic device rather than on paper. Pens create physical signatures, while ePen, mouse, tablet, and smartphone create electronic signatures. They have the same legality as that of a physically signed document. As many as 60 countries have passed laws to make electronic signatures fully legal and permissible by law. e-signatures are legally valid in India for over 18 years. The Information Technology Act (IT Act), passed in 2000, granted e-signatures the same legal status as handwritten signatures.

What is the difference between a digital signature and an electronic signature?

Key differences between a digital signature and an electronic signature are:

Usage: Digital signatures are used for securing a document from tampering while an electronic signature is used for verifying a document

Signature creation: You have to seek permission from a certification authority for using a digital signature While an electronic signature is done as per the intention of the signatory.

Authentication: Digital signatures use certificate based digital ids while an electronic signature verifies identity through email, OTP, phone pin etc.

What qualifies as an electronic signature?

The ESIGN act defines electronic signatures as “An electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” The versatility of its definition allows LunarPen to offer multiple solutions to capture an electronic signature using a smartphone, computer, or any portable device.

A qualified electronic signature (QES) includes all the secure features like

–  Ability to identify and link its signatory

– Allowing the signatory to access & control keys for creating an electronic signature
– Identify if the data is tampered after its accompanying message has been signed

What does an electronic signature looks like?

You have the sole authority to decide the look and feel of your electronic signature. Most electronic signatures look like handwritten signatures. When you create an esignature with LunarPen, you have the option to

  • Draw your esignature using mouse
  • Type the esignature with a keyboard
  • Write signature on the touch screen
  • Upload esignature into LunarPen account
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Best Practices of Electronic Signature Security

Best Practices of Electronic Signature Security

Electronic signature security is one of the top concerns of digital transactions as more and more businesses empower customers to make secure and faster transactions on the web. When you collaborate with an eSignature vendor, don’t look for an eSignature service that is ESIGN compliant or has a particular security specification. We recommend you to take a broader view of the e-signature security that also addresses:

  • Selecting appropriate authentication levels
  • Making esigned documents tamper-proof
  • Easier verification of esigned documents
  • Reliability of records independent of the vendor
  • Verifying vendor’s track record of protecting customer’s data
  • Creating trusted experience through white labeling

Such a focused multi-directional strategy protects the organization’s reputation, reinstates customer confidence, and reduces the risk of non-compliance fines in electronic signature security.

To identify the esignature security requirements against which you should evaluate solutions, you should proactively check these security best practices before finalizing and working with an esignature vendor.

Best practices for implementing Electronic Signature Security

Identification, Authentication, and Attribution

Identification: The identification process identifies first-time applicants using two types of information:

  • Personally Identifiable Information(PII) like Driving license, Aadhaar Card, Passport number
  • Nonpublic Personal Information(NPI) like credit score, income, social security number

You get Verified PII or NPI information through third-party identification services. In this case, look for an e-signature solution provider that smoothly integrates with third-party identity verification services to establish genuine esignature users’ identities.

Authentication: Once a signer’s identity is verified, organizations issue electronic credentials to the users to facilitate secure digital transactions. The organization dealing with high-value, high-risk business transactions use robust multi-factor authentication services to ensure a safe environment and protect identities, data, and digital lives.

In this case, look for an e-signature solution that easily integrates with authentication services and offers a wide range of authentication options for a smoother user experience like:

  • User authentication through user id and password
  • User authentication using secret Questions & Answer (Q&A)
  • Using e-Sign sessions for verification of email address
  • Uploading identification images for e-sign transaction

Attribution: Use the attribution process to prove the identity of the person who clicked to apply an esignature.

One of the quickest and cost-effective ways to establish attribution is to use affidavits.

Take a case where the signer has to click a button to e-sign a document on the agent’s device. Just before handing over the device’s control to the signer, the device handling agent or representative gets an affidavit text confirming that the signer has received the esignature device. The affidavit text successfully captures the transfer of control as a part of the audit trail.

Another easier way is to send a one-time passcode (OTP) via SMS text to the signer’s Smartphone for gaining access to the e-sign session.

Document and electronic signature security

The security of electronic signature and the esigned documents are equally crucial for a signed contract.

There are several points for consideration:

  • Electronic signature and the esigned documents must be secured using the digital signature security technology that creates a digital fingerprint of the signed document ( called a hash) used for verifying the integrity of the signed records. If there is an attempt to tamper with the documents, the electronic signature is visibly invalidated.
  • If signers esign a document on different days, then a comprehensive audit trail should include each signature’s date and time.
  • All electronic signatures, timestamps, and audit trails should be embedded directly within the document rather than stored separately in the cloud.
  • It must be easy to verify that there are no changes in the signed record, independent of the vendor.
  • One should avoid e signature solutions that require you to access servers to verify the signature or documents. It can pose significant problems for you if the subscription services stop or the e signature vendor goes out of business.

LunarPen uses audit trails to store and track every change in the document starting from tracking the date of signing a document to change signs in the document and retrieve data anytime for legal purposes.

esign a document

eSignature solutions

Cloud Security

eSignature solutions are available both on-premises and in the cloud.

The on-premises esignature solution runs entirely within the company’s network without the need for any external connection to keep the data on-site. On the other hand, a growing number of companies are adopting cloud storage to access documents for esignature transactions as it is speedy and cost-effective. However, it comes with several security risks like data privacy, shared servers, data leakage, and lack of data backups.

It would be best to look after esignature vendors that provide tailor-made secure storage solutions as per the organization’s need.

LunarPen understands these security risks very well and has partnered with leading cloud infrastructure service providers like Onedrive, Google Drive, and Dropbox to access documents securely and send them for e signature to respective signers and signees in a few seconds.

These cloud solutions follow world-class SSL and Perfect Forward Secrecy (PFS) encryption systems. With PFS, a user can’t reuse a private SSL key for sessions that have occurred in the past. Even if an unauthorized person gets access to the SSL key, it isn’t easy to decrypt older traffic, making cloud solutions highly safe for day-to-day business transactions.

esignature service providers

Use white labeling to safeguard signing service & customers against phishing attacks

Enhancing customer experience is the prime focus area of digital transformation. Organizations often depend on third-party solutions to support their day-to-day business process. A slight mistake ruins customer experience, leaks confidential information, and endangers the company’s finances that can tarnish its image.

So, a company must safeguard itself, its clients, and the brand name by ensuring a safe and transparent online transaction process.

The best practice is to white label the entire e-signing experience so that only your brand is visible across the transaction and not the vendor’s brand. White labeling prevents fraudsters from attacking your valuable customers through phishing emails.

Organizations should look for esignature service providers that enable the use of white labeling in esign process.

As a responsible esignature company, LunarPen recommends white labeling in every aspect of the esign process.

The best esignature solution service provider should allow you to

  • Use the company’s email servers to send direct emails and not through third-party service providers.
  • Customize the brand’s logo, theme color & visibility of header, footer, navigation bar,
  • Personalize the content, look & sound of email notifications
  • Customize dialog boxes and error messages

Case Study:  How Hackers used fake DocuSign email for phishing

Hackers used DocuSign documents to steal user credentials from all the major email providers.

The attack began when a user received an unknown email that appeared to be from DocuSign as it included its original company logo and the email content seemed like real emails sent from the company.

The email’s first line didn’t have any recipient’s name and only mentioned “Good day.”

Cofence, phishing detection, and response platform analyzed the email header. They realized that the threat source originated from an unknown domain narndeo-tech.com owned by Hetzner, a well-known web hosting service provider and data center operator in Germany.

Its researchers found an embedded hyperlink pointing towards six different options for users to enter their credentials and access DocuSign documents. Fake login pages were recreated for Ms. Outlook, Office 365, Gmail, and Apple iCloud so that users enter and reveal their original login credentials.

It is the best example of a phishing case where cybercriminals used a well-known company’s brand name to steal customer information using emails.

LunarPen strongly advises its users to be extremely cautious when using an external link on an email that asks them to share their user credentials.

If you are keen on learning more about the electronic signature security checklist, click here.

Conclusion

When businesses implement an e-signature solution, It is always advisable to take a broad view of the electronic signature security, starting from identification, authentication and ending with the solution provider’s ability to build trust and a smooth user experience.

Trusted service means stringent security measures. But at the same time, the security level of an esignature solution should not conflict with the customer experience. It is important to balance security concerns with the solution usability as over-engineering can negatively affect solution adoption and usability.

Frequently Asked Questions

What is an eSign document?

eSign document means an electronically signed document in PDF, Doc, Xls formats. Such documents are signed using an ePen, mouse, or finger movement on any smartphone, laptop & Tablet securely using an e signature app protected by 256-bit HTTPS advanced encryption.

What is the purpose of esigning a document?

Its purpose is to authenticate and quickly identify the person who has initiated the written communication and ensure a secure exchange of information between different parties. The esignature made by an individual on the document signifies knowledge, approval, acceptance, or obligation.

What are the benefits of an electronic signature?

These are the significant benefits of using electronic signature:

1) Save Costs: Save time in doing paperwork, printing, scanning, mailing, delivering, and storing the document
2) Save Time: Saves you from age-old rituals of paperwork. Going digital saves a lot of time, allowing you to focus on other essential tasks.
3) Legal Compliance: Electronic signatures are legally binded and acceptable all over the world.
4) Mobility: A significant advantage of eSignatures is helping businesses function irrespective of location & time.

How can I eSign documents for free?

Follow these simple steps to eSign a document for free:

Step 1: Click LunarPen to open a free account
Step 2: Create or upload a document using templates, Google Drive & Dropbox
Step 3: Use the signed document sharing feature
Step 5: Send the document for signature
Step 6: Use the LunarPen interface to esign your documents for free
Step 7: Receive signed documents by email

Posted by Lunar Pen in eSignaure Law, 0 comments
How to eSign a Document

How to eSign a Document

If you are wondering how to eSign a document, it is definitely easier than the lengthier alternative of printing, signing, scanning and finally emailing the document to the intended recipients. There has been a sharp increase in the use of e-signatures due to its contribution in ease of doing business while ensuring the safety, security and cost effectiveness of signed documents.

That’s the reason behind the global popularity of the trending search term “How to eSign a Document” as more startups, entrepreneurs & businesses from US, UK and India are curious to learn about it.

Google Trends

Data Source: Google Trends

We have to understand the concept of eSign first before knowing the in-depth process of eSigning a document.

What is eSign?

eSign or eSignature refers to data in electronic form which is a legal way to get approval or consent on electronic documents (Sources : laptops, Tablets, Smartphone) and is used by the signatory to replace handwritten signatures in virtually every personal or business process.

eSign provides the same legal standing like a handwritten signature and is legal, enforceable and trusted by countries all over the world, as it adheres to the specific regulation requirements under which it was created. These reasons make eSign extremely safe & secure for business transactions anytime from anywhere.

Why eSign a document?

Secure online services: eSign service can only be accessed by users that have been authenticated using e-KYC services. To prevent misuse and fraud of eSign, the private keys of esign users are destroyed immediately after one time use.

Easy to implement:  eSign records the e-KYC ID to verify the identity of the signer and provides configurable authentication options for eKYC that includes the OTP or biometric details of the e-KYC service provider enabling the eSign users to get easy access to legally valid Digital Signature service.

Easier access to legally valid signatures: eSign process includes the signer consent, digital Signature Certificate issuance request and digital Signature creation ensuring assured access to legally valid signatures only.

Respects Privacy: eSign ensures privacy of the signer by requiring that only the thumbprint of the document be submitted for signature function instead of the whole document.

How to eSign a Document online?

LunarPen is the best eSignature app trusted by top companies that lets you electronically sign all the documents, safely, securely and absolutely free of cost to manage your contracts and drive business seamlessly.

Take a look at the simple step by step process to eSign documents:

  • Create or upload a document:

You can upload the documents by using different options like:

Upload File button – Go to My computer, select the drive and trace the file location to upload the file in pdf, text, doc, docx, csv, xlx, png & jpg formats.

Select Templates – Use in-built templates for invoice, sales letter and reuse them. Share templates to your team members to save time and upload custom documents quickly.

Google Drive & Dropbox – LunarPen gives you industry first features to upload documents directly from the cloud either by using Google drive or Dropbox authentication.

After the documents are uploaded, a preview of the document will appear as a thumbnail.

best digital signature service

  • Use the Signed document sharing feature:

LunarPen makes your day to day task easier by sharing two different options to share the signed document.

Top electronic signature companies

My Sign: This option gives you the flexibility to share the signed document created by you with a closed group of people to receive the documents in private.

MySelf & Others: If you have a document that needs your sign as well as the signature of other professionals then this option is useful.

  • Send for Signature:

Once you have selected any of the two options, you have to fill out details like subject & message to explain the agenda of the signed documents to the recipients. Finally, Click “Prepare doc for signing” once done.

signature electronics company

  • Use the LunarPen interface to sign your document:

LunarPen gives you advanced options to insert different fields needed for signing a document like Name, initials, Signature, Signature date and the checkbox.

best electronic signature

LunarPen gives you customized options to draw, write and upload your signature using LunarPen Signature field. It’s one click options enable you to use customized signature for all kinds of documents.

digital signature service

After you have inserted the signature in the document using the signature field and clicked Send, the signed document is sent on the specified emails and you get to see the summary of the shared document like the one shown below.

electronic signature companies

  • Receive signed document on emails:

The signed document is received by both the signee and the recipients on email in below format ensuring that only the added email ids get the opportunity to view & access the esign document on the LunarPen app safely and securely.

signature electronics company

Is eSigning a document safe?

LunarPen uses advanced audit trail features to preserve the information related to editing, sending and signing documents in seconds. This makes it possible to track and audit the digital signatures transparently, so that each transaction can be traced.

To ensure security throughout the signing and verification process:

  • Each party is authenticated via a private code sent via SMS to offer vital security & protection to online users
  • Data is encrypted and stored using industry- standard 256-bit HTTPS advanced encryption making it difficult for hackers to breach it
  • Signed document can be accessed and viewed only by authenticated personnel on LunarPen platform
  • Our e-signature application complies with eSign acts to prevent data leaks & make it threat proof
  • Qualified advanced electronic signature (AES) ensures protection against forgery as signature creation data is used only once

Are you ready to eSign a document?

Now you know the concepts of electronically signing a document which is the safest way to sign crucial documents without the fear of signee data getting leaked to the third person. eSigning a document not only saves cost & time but improves user convenience and addresses privacy concerns as well.

It is important for professionals to align towards the best solution to remain consistent and competitive in the market. LunarPen is a smart business-friendly document management solution that
empower organizations to accelerate their business processes, minimize cost, and maximize productivity.

Click Now to securely create delivers eSign and manage your documents with LunarPen.

Frequently Asked Questions

  What is an eSign document?

eSign document means an electronically signed document in PDF, Doc, Xls formats. Such documents are signed using an ePen, mouse, or finger movement on any smartphone, laptop & Tablet securely using an e signature app protected by 256-bit HTTPS advanced encryption.

  What is the purpose of esigning a document?

Its purpose is to authenticate and quickly identify the person who has initiated the written communication and ensure a secure exchange of information between different parties. The esignature made by an individual on the document signifies knowledge, approval, acceptance, or obligation.

  What are the benefits of an electronic signature?

These are the significant benefits of using electronic signature:

1) Save Costs: Save time in doing paperwork, printing, scanning, mailing, delivering, and storing the document
2) Save Time: Saves you from age-old rituals of paperwork. Going digital saves a lot of time, allowing you to focus on other essential tasks.
3) Legal Compliance: Electronic signatures are legally binded and acceptable all over the world.
4) Mobility: A significant advantage of eSignatures is helping businesses function irrespective of location & time.

  How can I eSign documents for free?

Follow these simple steps to eSign a document for free:

Step 1: Click LunarPen to open a free account
Step 2: Create or upload a document using templates, Google Drive & Dropbox
Step 3: Use the signed document sharing feature
Step 5: Send the document for signature
Step 6: Use the LunarPen interface to esign your documents for free
Step 7: Receive signed documents by email

Posted by Lunar Pen in eSignaure Law, 0 comments

Are Electronic Signatures Valid in New York?

The Uniform Electronic Transactions Act (UETA) has been adopted by most of the United States. However, two states – Illinois and New York – have not done so

This fact has led some to worry about the validity of electronic signatures in these states, particularly in New York, which is the home of the hub of New York City. However, instead of UETA, both Illinois and New York State have adopted their own statutes regarding electronic signatures.

Electronic Signatures and Records Act (ESRA)

In New York, this statue is the Electronic Signatures and Records Act (ESRA). In essence, this law establishes that electronic signatures have the same legal validity as handwritten signatures.

It also confirms that these signatures are admissible in a court of law, as long as they comply with all other rules related to the evidence in question. There is no requirement of using electronic signatures, but it allows its usage is preferred.

However, as with UETA, ESRA does not apply to certain documents. These include documents such as wills and trusts, as well as DNR orders, health care proxies, and documents that grant one person power of attorney over another.

It should be kept in mind that the ESRA can be used to donate organs to the New York State Donate Life Registry for Organ and Tissue Donations. This creates an exception to the provision in the ESRA, which bars the use of electronic signatures to “dispose of an individual’s person or property upon death.” 

The ESRA has also resulted in the creation of an ‘electronic facilitator’ in the state’s Office of Information Technology Services (ITS). This role is responsible for making the rules and regulations surrounding electronic signatures in New York State widely known among the private and public sectors. Other responsibilities include developing guidelines and standards around the use of electronic signatures, providing up-to-date information regarding the same via the Internet, and more.

Other Guidelines Relating to Electronic Signatures in New York

Aside from the ESRA, New York States must also comply with the guidelines set out in the federal Electronic Signatures in Global and National Commerce (ESIGN) Act. 

The ESIGN Act is a federal law that governs the entirety of the United States. This differentiates from UETA, which must first be adopted by each state before it is a law.

The ESIGN Act validates the use of electronic records and signatures regarding transactions relating to interstate and foreign trade. This act means that electronic signatures and contracts cannot be deemed illegal solely because it is in electronic and not manual form. Furthermore, it establishes that a contract cannot be denied legality solely because it involves using an electronic signature or electronic record.

Per the ESIGN Act, to supersede this act, a state must either adopt UETA or specify an alternative law that regulates and allows the use of electronic records and electronic signatures. This law must be consistent with the ESIGN Act and cannot require or give greater legal protection to technical specifications and specific technology.

Conclusion:

Thus, while New York State has not adopted UETA, thanks to the combined forces of the ESIGN Act and the ESRA, the use of electronic signatures is still valid in the state.

Posted by Lunar Pen in eSignaure Law, 0 comments

SEC Adopts Rule Amendments Permitting the Use of Electronic Signatures in Electronic Filings

On November 20th, 2020, the Securities and Exchange Commission (SEC) adopted a rule intended to modernize its operations. This rule is an amendment to the existing Rule 302(b) of Regulation S-T and is intended to provide greater flexibility for SEC filings. 

This is done by permitting the use of electronic signatures in authentication documents. 

Furthermore, the SEC has also amended its Rules of Practice. This amendment requires that people involved with administrative proceedings file and serve any documents electronically.

As currently written, Rule 302(b) of Regulation S-T requires that all signatories involved with an electronic filing manually sign an authentication document to authenticate the signature associated with the filing in question. This authentication document must then be retained by the person filing the document for five years. If requested by the SEC, it must be furnished to the Commission. 

However, the Covid-19 pandemic has made obtaining manual signatures more complicated than initially conceived. Furthermore, electronic signature technology has also improved since the formulation of the rule. Due to these factors, the amended rule now allows signatories to electronic filings to sign an authentication document via an e-signature. 

Per the amendment, if a signatory wishes to sign via an e-signature, they must:

  • Present a credential that authenticates their identity. This credential can be physical, logical, or digital, as convenient. 
  • Reasonably provide for non-repudiation of the signature.
  • Provide the signature be logically associated (via attachment, affixation, or other means) with the document or signature page that is being signed. Doing so will provide the signatory with an opportunity to review the document before signing, as well as notice of the nature and substance of the document being signed.
  • Include a timestamp that will record the date and timestamp of the signature. This is as SEC rules still require the document to have been signed before or at the time when the electronic filing is made with the Commission.

Additionally, before using electronic signatures in order to execute documents meant to be filed with the Commission, the signatory must first manually sign a document. This document attests that agree using their electronic signature in such a manner is the legal equivalent of using their manual signature. 

The signatory must retain this attestation document for at least seven years after the most recent authentication document that has been electronically signed. They must also be able to provide it to the Commission upon request.

All other requirements associated with Rule 302(b) will remain unchanged. These include the existing conditions that the filer retains a copy of the authentication document for a period of five years after the filing, as previously mentioned.

The amendments to the SEC’s Rules of Practice include requiring service of documents and electronic filings in relation to administrative proceedings. Furthermore, they require that sensitive information be redacted from many such documents before filing with the SEC.

These amendments become effective within 30 days of the SEC’s release in the Federal Register. However, compliance is not required until April 12th, 2021. Furthermore, following this date, there will also be a 90-day phase-in period allowed for.

Sources:

 

Posted by Lunar Pen in eSignaure Law, 0 comments

Understanding The Uniform Electronic Transactions Act (UETA)

When it comes to electronic signatures in the United States of America, one of the most important laws that companies should keep in mind is the Uniform Electronic Transactions Act (UETA). Alongside the Electronic Signatures in Global and National Commerce Act (ESIGN Act), it was enacted to help make electronic contracts and electronic signatures valid, legal, and defensible.

UETA Act

UETA was proposed by the National Conference of Commissioners on Uniform State Laws (NCCUSL) and is one of several United States Uniform Acts. It has been adopted by 48 states, as well as the District of Columbia, the U.S. Virgin Islands, and Puerto Rico. The last state to adopt it was Washington in 2020, and the only states not to adopt the law currently are Illinois and New York.

What is the National Conference of Commissioners on Uniform State Laws?

Also known as the Uniform Law Commission, the National Conference of Commissioners on Uniform State Laws (NCCUSL) is a non-profit association established in 1892. It aims to provide U.S. states and territories with legislation that is both well-researched and drafted and which addresses critical areas of state law.

The commission exists to ensure that certain key laws are uniform across states. This prevents confusion when presented with cross-state issues. For example, in the case of the UETS, the uniform law ensures that the governance of electronic signatures is the same across states, which makes conducting cross-state business easier for corporations and companies.

What is a Uniform Act?

A Uniform Act is a state law that has been drafted and proposed by NCCUSL. When adopted by states, these laws ensure that certain key aspects of the legislation are uniform across the country and make cross-state matters easier to regulate.

What is UETA?

UETA serves as a framework that states can use in order to determine the legal status of electronic signatures. It was approved by NCCUSL in 1999, after which states started the process of adopting it into state law.

Unlike the ESIGN Act, it is not federal law. However, it has legal standing in the states that have adopted it into law. In these states, it provides businesses with a guarantee that electronic signatures have the same legal protections as handwritten signatures.

This act is applicable in cases of business transactions, as well as when it comes to e-commerce transactions. Like with the ESIGN Act, it does not apply to wills and trusts, as well as several other documents that are governed by courts. It does, however, apply to some governmental matters.

Under UETA, an electronic document must meet four major requirements in order to be considered valid. These are:

  • Intent to Sign: As with handwritten signatures, all parties involved must have intended to sign the documentation. Signatures that do not also have an intention to sign behind them are considered invalid.
  • Consent to Do Business Electronically: As an electronic document implies business being conducted electronically, all parties involved must consent to do business in this manner. This is an easy requirement to prove in the case of business transactions. However, it can be more complicated in the case of a provider collecting signatures from customers, as in the case of e-commerce. 

However, it is possible to provide proof of customer consent to doing business electronically in one of the following ways:

  • Making the customer sign a copy of the UETA Customer Consent Disclosure
  • Showing proof that the customer agreed to conduct the transaction through the use of an electronic document
  • Showing proof that the customer did not withdraw their consent to conducting business electronically.
  • Association of Signature with the Record: In order to conduct business electronically, you will undoubtedly be making use of a system that allows you to capture eSignatures. This system should be one that creates some form of a record of the transaction. The form used in order to create this record should be one that shows the process of signing the document and should also prove that the other party has used an electronic signature in order to complete the transaction.
  • Retention of the Record: UETA compliance requires more than simply creating a written record of the electronic transaction. Any record created should be accessible to all parties that have signed the electronic document.

If these requirements are not met, electronic documents and signatures can be challenged in court. This can be a costly process – even if you win the challenge, you will have to pay for legal fees, and the legal proceeding can take up months and years of your time. By making sure that your documents meet the requirements set out by UETA, you ensure that you do not have to worry about such a situation arising in the future if you are faced with a disgruntled customer or business partner.

What Definitions Are Set Out In UETA?

To better clarify what is meant by electronic record and electronic signature, UETA has clarified definitions of these two terms. These definitions ensure that there is no confusion when understanding what the law demands. 

  • Electronic Record: According to UETA, an electronic record is any record that is “created, generated, sent, communicated, received, or stored by electronic means.”
  • Electronic Signature: UETA also clarifies a definition of what an electronic signature is. According to the text of the act, it is “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”

What Does UETA Cover?

According to the text of the act, UETA covers electronic contracts that relate to “business, commercial (including consumer) and governmental matters.” This means that this act does not cover any documents and electronic transactions between individuals that do not relate to business matters. Also, any electronic records and electronic signatures that are unrelated to business transactions are not covered by UETA.

Other Important Considerations for Ensuring UETA Compliance

One other important consideration to keep in mind is that for any electronic documents to be deemed valid under UETA, they must not have been tampered with.

If the documents have been tampered with, they are no longer considered valid. This means that organizations should ensure that the software they are using to conduct business electronically must have checks and measures to ensure that all parties involved are signing a document that is intact in its original state.

Furthermore, your company should also have a policy dictating how written records are retained. This should describe what types of electronic documents should be retained, how they should be retained, and for how long they should be retained. This is done to ensure that your employees have a clear guideline to follow. However, a retention policy also means that it is easy to quickly get rid of any unnecessary documents once the statutory requirements for retention have passed.

Also, by having a clear written record policy, you ensure that in case of any litigation or regulatory action, it will be easy to defend against any potential allegations of wrongdoing when it comes to destroying records. 

Your record retention policy should set out how you are going to store electronic documents. This method should allow for the easy recovery of records if needed, and your policy should also set out the method by which documents will be destroyed at the time required.

If you are a business owner, your records should include all documents produced by your employees, whether paper or electronic. This includes all emails, proposals, agreement correspondences, contracts, quotes, texts, etc. Along with these, you should also include calendar and appointment books are part of your business records.

Does UETA Mean That Electronic Signatures Are Enforceable?

The language of UETA does not automatically make electronic signatures enforceable. What it does do is establish that legally, electronic signatures are the equivalent of manual signatures. It ensures that records and signatures cannot be excluded from evidence solely because it is available in an electronic form and not a manual form.

Business owners should keep in mind that not all manual signatures are enforceable. Manual signatures can be forged, or the people signing a document may not be qualified to do so. In such cases, despite the presence of a manual signature, the final document cannot be enforced.

Similarly, electronic signatures can encounter such issues. UETA simply ensures that you will have no more issues with electronic signatures than you would have had with manual signatures in such a case. 

In order to make sure that your electronic documents are enforceable under UETA, they should meet the previously mentioned requirements. Of the four that we have discussed, the most important of them is that all parties involved should have consented to do business electronically.

Many businesses do so by displaying that the other party involved has not withdrawn their consent to doing business electronically. One of the most common ways this can be seen is through the use of ‘checkboxes’ on e-commerce websites that refer to the buyer’s agreement to the contract terms. 

However, in such a case, as soon as the buyer claims that they did not want to enter the agreement or did not agree to the terms set out, the contract will no longer be enforceable under UETA. In order to prevent such a situation from happening, it is recommended that you use a more involved system for electronic signatures where possible. These will not only make it clear who has signed the document, it will also clearly show intent and agreement to the contract terms, making the resulting document easier to enforce under the terms set out by UETA.

Furthermore, it is recommended that the procedure requires the customer to clearly identify themselves. Instead of simply checking a box, it should ask them to fill in their name and identifying and contact information so that they can be easily identified. Similarly, requiring the customer to use passwords and security codes that they pick themselves can also satisfy the requirement of having an identifier for your customer. 

Other good options can include a unique signature that the customer can create with the use of a computer mouse. Any transmissions sent to you for electronic documents should be maintained, as they can similarly be used to help identify the source. If the electronic contract or document is long and spans several pages, it is also recommended that you make the customer fill in their signature on each page. This displays that they understand and agree to all of the terms in the contract or document.

UETA Adoption

As UETA is not a federal law, each state can make its own discussion regarding whether or not to adopt it into state law. At the moment, only two states have not adopted UETA. However, they have similar laws that help ensure the legality of electronic signatures.

  • Illinois: Illinois has currently enacted the Electronic Commerce Security Act over UETA. This law was enacted in 1999 and was modeled on the ESIGN Act. This law mandates that no information, records, and signatures can be deemed to lack legality, validity, or enforceability solely on the basis of the fact that they are in electronic form rather than physical form.
  • New York: New York has enacted the Electronic Signatures and Records Act. It was signed into law in 2000. This act explicitly states that electronic signatures have the same legal standing and weight as handwritten signatures. 

Notarization Under UETA

If you have any documents that must be notarized before submission, they can still be submitted electronically. However, the notary must be able to have their signature included in the electronic form as well, to provide proof of notarization.

The notarization or verification should not be a separate document. Instead, it should be attached to the electronic document being notarized, and it should also be retained along with the document for future proof or reference.

UETA vs. ESIGN Act

UETA and the ESIGN Act have certain similarities and are the two pieces of legislation that are most often referred to when it comes to discussing the legality of electronic signatures. As they exist to address similar issues, they are often confused and conflated with each other.

There are some areas in which the acts are similar to each other:

  • Like UETA, the ESIGN Act also excludes several types of documents that are usually under the eye of the courts. These documents include wills, trusts, eviction notices, divorce papers, and more. 
  • Both legislations are focused on the use of electronic signatures for business, governmental, and commercial use. 
  • Similar to UETA, the ESIGN Act also allows notaries to attach electronic signatures to electronic signatures, effectively acting as witnesses. Essentially, both acts allow documents that require notarization to be transmitted online.

However, there are some key differences between the two acts:

  • Unlike UETA, the ESIGN Act is a federal law. This means that every state in the country must be compliant with it, while when it comes to UETA, only states that have adopted it into law fall under its purview. This is why not all 50 states fall under the purview of UETA – it has not been uniformly adopted across the country. Furthermore, some states have added their own amendments and additions, so the specific details of the Uniform Electronic Transactions Act may differ from state to state.
  • If there is a conflict between UETA and the ESIGN Act, the state law (UETA) will govern the issue in most cases. However, the ESIGN Act mandates that while state laws do not have to match up completely with federal legislation, each state must provide an equivalent level of protection for electronic signatures and contracts.
  • Unlike the ESIGN Act, UETA emphasizes the context and circumstances around which parties entered an electronic transaction in order to define the validity and enforceability of the document.

Final Thoughts

Like the ESIGN Act, UETA is a key piece of legislation that ensures that electronic signatures and documents are treated as equivalent to physical documents and signatures. These laws are essential in allowing for business agreements and contracts to conducted easily, as there is no need to spend time waiting for the transmission of physical documents.

UETA, in particular, is important when it comes to inter-state business transactions. In the USA, state law takes precedence over federal law in the case of electronic signatures. Providing states with uniform legislation ensures that businesses can easily be compliant with state and federal law when conduction commerce across state lines. 

It reduces the need for familiarity with several pieces of legislation, and it makes the search for an effective electronic signature provide and document management system easier. This is because both corporations and individuals simply have to search for providers compliant with UETA and the ESIGN Act, as opposed to searching for those compliant with 50 different pieces of state legislation. 

As the earlier piece of legislation – UETA was first proposed in 1999, while the ESIGN Act was proposed in 2000 – UETA also served as a model for the creation of a federal law governing electronic signatures. 

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Posted by Lunar Pen in eSignaure Law, 0 comments