Don’t Confuse the “E’s”: Email and E-Signature Require Different Consents in the NPR

16th Oct 2019
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In the context of the Notice of Proposed Rulemaking (NPR) of the Consumer Financial Protection Bureau, the Email and E-Sign need to be viewed as different things requiring different consents. The CFPB Notice of Proposed Rule is a policy document that helps guide the email and eSign users. Your e Sign consent won’t be the same as that consent to an email.


NPR provides an important step in helping lay a foundation for compliance in communication with consumers using electronic and digital channels. Almost every business uses email as a means of communication but not many organizations use an eSign app to authenticate and legally protect their documents or contracts and agreements. It is important that industry participants understand what is contained in the NPR policy framework so that they can differentiate between eSigns and emails. The participants need to read the content of the proposals contained in NPR in addition to the analysis offered by CFPB so that they realize the nuances of permitted activities that debt collectors are able to utilize when contacting and reaching out to consumers.

Notice of Proposed Rulemaking and Debt Collectors

The CFPB's Notice of Proposed Rule proposes to make it clear how debt collectors can provide digital or electronic disclosures to the consumer. The ESIGN Act has provided a rule that governs the validity of the process of using eSignatures. When it comes to written disclosures that have a statutory mandate, ESIGN allows the disclosures to be given in an electronic form contrary to paper writings provided that the consumer is able to consent the use of electronic means.


In regard to debt collection, the statutorily-mandated disclosures include the validation notice that is pursuant to § 1692g usually sent in a timeframe of five days from the time of initial communication. Another disclosure in debt collection is the notice pertaining to dispute rights and requesting original creditor information.

eSign and Email Means More Responsibility

In the past, eSignature and email in addition text were regarded as unique operation functions within the ARM industry. When the NPR was released, both eSignature and email have represented new opportunities for allowing consumer engagement. Now businesses can engage consumers using these methods of communication. While there are more opportunities for reaching out and communicating to consumers brought about by email and e Signature app technologies, it also means more responsibility for the parties involved especially when it comes to agreeing on the use of the eSignature and email. The aspect of consent should be taken seriously and not confused with using the eSign and email.

Things to Consider in Esign and Email Consent

There are various things you need to consider regarding email and eSign consent, and they include:

1. The consent to receiving Email isn't the same consent provided under ESIGN Act

According to NPR, the consent to receiving email needs to come directly from a consumer. That being said, just because a consumer agreed to receive email communications doesn't imply that they agreed to receive electronic disclosures. Before debt collectors can send disclosures mandated by the statutory, the consumer needs to be made aware of their rights as far as ESIGN Act is concerned. This means that they need to be sent a noticeable and clear statement showing them their rights as stipulated in ESIGN Act.

The rights they need to be made aware of include the right to not agree to use eSignatures and the ability to withdraw the same agreement or consent. Other rights under ESIGN Act include understanding the scope of the consent under the Act, and the software or hardware requirements for accessing and retaining electronic records.

2. Consent to eSign a person using a work email address might not be consent to send an email to a consumer at work

A consumer may agree to receive electronic disclosures via a work email, however, you need to make sure that you have a clear and visible statement that confirms that a work address is the one being used when sending a document for eSignature. You need to take caution before you can email to a consumer using their workplace email address because it could result in issues of consent when pursuing debt collection.

NPR suggests that it's unfair and unacceptable to contact a consumer in their workplace without them agreeing to be conducted through that channel. Again, NPR notes that just because a consumer has consented receiving legal documents perhaps on a one-time basis does not qualify him or her to continue receiving other more frequent emails at their workplace. If an eSign consent is going to use the workplace address for now and future communication, you need to ensure that you put into consideration other special languages to help inform that consumer about the scope of their agreement. If they have agreed to receive an email at work, you need to tell them for how long they will be receiving the emails through the workplace email when sending eSign documents for debt collection.

3. Using eSign can bring about operational setbacks

When using eSignature you will need to communicate more with the consumer than when using traditional email consent. Prior to providing electronic disclosure to the consumers, there is a need to have enhanced staff training to help understand the content of the consent and how it is managed. The consumer needs to understand how the eSign software works as well as their right in using the tool.

4. Having consent after opting out

When you receive an account from a client or a past debt collector in which a consumer opted out of their text or email, then you may find that getting consent for eSignature can be a challenge particularly in the first days of the debt collection process. If this is the case, then it may require you to send by mail the validation notice and not by email.


In situations where a consumer has contacted you during placement and the consumer makes the initial communication by text or email, it is possible for you to proceed to utilize eSign consent process through the same text or email communication method. If the consumer contacts you by phone during placement, then you have to obtain a new text or email consent to allow you to end the eSignature consent information.

Conclusion

When it comes to debt collection, the parties need to communicate effectively and lay down the method of communication they will use when sending eSignature documents to consumers. The consumers need to be told their rights as stipulated in ESIGN Act and NPR framework.

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