paperwork

The Problem with E-Signatures

Throughout elementary school, I remember I had ten different versions of my signature. Some were decorated with smiley faces, others had giant swirls at the end of each letter, and the remaining versions just had a single letter with intricate circles surrounding it. All of them were terrible and overwhelmingly complicated, but each one I was able to claim as my own and share with restaurants and shops as a form of identification. It was also fun to dramatically scribble on a piece of paper.

I have since grown out of that phase and now only use one boring signature, mostly because I don’t have enough time to craft an intricate design whenever I need to sign along a dotted line. The rest of the world has also adopted the same attitude of rushing through things, especially now that society uses “e-signatures” to consent to an official document, whether that is a marriage license or a credit card receipt.

The concept of “digital signatures” was first introduced in 1869, when it became legally accepted to send signatures via telegraph. It wasn’t until the 1980s when the topic of copied signatures resurfaced; during the rise of the fax machine, courts declared faxed signed documents to be valid. Finally in the year 2000, President Bill Clinton signed into law the Electronic Signatures in Global and National Commerce Act (also known as the E-Sign Act). This law “… allows the use of electronic records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing, if the consumer has affirmatively consented to such use and has not withdrawn such consent.” In other words, electronic signatures are legally binding.

The E-Sign Act prompted many programs to come up with their own e-signature features, such as DocuSign and CoSign. Thanks to these tools, companies can save millions of dollars because people no longer have to spend money on FedEx deliveries and printing supplies to ship a document and have it signed. All they have to do is send an email. E-signatures also save time!

The rules governing electronic signatures vary from country to country; one type of document that accepts electronic signature in one country may not be the case for another. In the United States, “the E-Sign Act and most state laws exclude real property transfers, wills and some legally required notices to consumers.” On the other hand, the EU has two different types of electronic signatures. One is for basic transactions (which cannot be denied legal effect solely based on their electronic form) and the other is for more advanced agreements (these electronic signatures include unique identification measures to make sure the signer is the correct individual and to validate the certificate).

The convenience of electronic signatures in the United States also comes at a price, of course. If official documents that are not handled through e-signature vendors like DocuSign and CoSign, can be signed digitally, and therefore, remotely, how can people verify that the right people signed the documents? In the Adams v. Superior Court of Orange County (2010) court case, Lynn Adams applied to work for Quicksilver and was told that she had to pass an online background check in order to complete her hiring process. When she received a link from a Quicksilver employee to the online background check form, she found that her name was filled out next to the statement, “By typing my name, I fully understand the above Notice and Authorization.” Adams testified that she did not sign the document, and the people who had access to the link were the ones who had done it. The court found that there wasn’t enough proof to say that Adams signed the document, and sided in Adams’s favor.

Adams won the case, but the decision fails to address some of the concerns the case raised. What happens to contracts and documents that are being signed without the intended signer’s’ knowledge? If a random person can potentially sign any document for anyone, are those documents no longer valid? And if an electronic signature does not necessarily belong to any one person, what will stop people from pulling out from an agreement they no longer want to be a part of by dishonestly arguing that they did not sign the document in the first place?

While people are more efficient by using electronic signatures, there are risks that may cost companies and individuals even more time and money than they are saving. DocuSign and other e-signature vendors that provide extra security are solutions to this problem, but they are not enough. Without any universal measure for authentication, our signature no longer belongs to us alone, but rather to everyone who knows our name. Until the US adopts a more secure option, like the EU’s authentication requirements for advanced agreements, e-signatures will never be the ideal option.