The past few months have seen an unprecedented rise in the number of electronic signature projects undertaken on behalf of leasing and finance companies.
With speed being of the essence for the supplier and the customer, and as customer expectation moves towards a culture of everything happening instantly, leasing companies are exploring new ways to speed up their processes.
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Electronic or ‘e’-signatures can benefit businesses in a number of ways: they can expedite the completion of face-to-face or distance agreements; cut the amount of paper generated and issued to customers; and speed up the pay-out to suppliers, while at the same time speeding-up the release to customers.
E-signatures come in various guises: a simple tick box signature within a computer system, a salesman’s portable tablet computer, or via a stylus and pad; each used to capture and record customer signatures electronically.
But in order to ensure that agreements are enforceable without question, we need the certainty that the law supports the technology. For example, an agreement regulated by The Consumer Credit Act 1974 (CCA) states that an agreement must be ‘signed’. However, the definition of ‘signed’ does not specifically include (and therefore exclude) e-signatures. There are clearly fewer issues in the context of unregulated and B2B contracts.
We are pleased to say that regulations introduced under the CCA, along with some very helpful court decisions, do provide considerable comfort an agreement can be concluded using an e-signature, provided – in our own words – ‘it it is no less effective than a manuscript signature’. Each e-signature system that is built must be looked at individually to ensure it meets the requirements of the general law of contract and the CCA.
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By GlobalDataWe have seen a mixture of in-house and externally developed systems over the last 12 months. Either is capable of fulfilling the core legal criteria, but external systems tend to be able to provide a more robust and clearly independent self-governing system, capable of retaining full integrity of the information, which is one of the most important factors in proving an agreement is enforceable if challenged.
If it is challenged, it is important to be able to demonstrate the information in the agreement could not be changed by any computer system or through human intervention at any point after it has been signed and accepted by the customer. If a customer alleges the information has been changed, you must be able to show that the document is ‘locked’ once it is submitted by the customer. This is why external systems seem to attract the greatest support.
From a regulated agreement perspective, we must be able to show that the agreement and the process complies with the CCA and the Consumer Credit (Agreement) Regulations 2010. The customer must receive an explanation and Standard European Consumer Credit Information (SECCI) and then take time to review the documentation and not just scroll to the end and click ‘accepted’.
There is plenty to think about. If you habitually, or only occasionally, securitise your agreements, then processes and paperwork must stand up to robust challenges.
Natalie Evans is an associate with Shoosmiths
