Fwd: [IPN] Ralph Nader: Digital signature legislation must protect consumers

[Ian Lowry <lowry_ian@hotmail.com>]

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----Original Message Follows----
From: James Love <love@cptech.org>
To: undisclosed-recipients:;
Subject: [IPN] Ralph Nader: Digital signature legislation must protect 
consumers
Date: Wed, 2 Feb 2000 11:18:45 -0600 (CST)

http://www.computerworld.com/home/print.nsf/all/000117E08E

Digital signature legislation must protect consumers

  By Ralph Nader

01/17/2000 A window salesman talks an elderly woman into buying
10 windows for $10,000. She signs several papers, including one
whereby she consents to receive the contract and all notices
relating to the sale over the Internet at an e-mail address
established for her by the salesman. She doesn't own or know how
to use a computer. The window salesman doesn't provide any paper
copies of the documents.

A savvy young man decides to buy a car but finds he must first
sign a consent form similar to the one presented to the elderly
woman. He objects,  but the salesman says if the young man
doesn't agree to receive everything electronically, the car's
price will rise by $1,000.

A professor shops the Web for a PC and enters into a contract to
buy one. He agrees to receive the contract and other legal
documents electronically. His copy of the contract is sent in
WordPerfect 6.0 format; to open and print it, he must save it
as a Microsoft Word file. The computer arrives but isn't the one
he ordered or the one referred to in his contract. He contacts
the computer dealer and is told that he received what the
dealer's version of the contract indicates. The professor's
attorney tells him he is stuck: He doesn't have a copy of the
contract that he can use in court, and terms in the contract that
he was sent don't match the terms on the Web page.

All of the situations depicted in these scenarios are currently
illegal but would be made legal under HR 1714 -- the Third
Millennium Digital Commerce Act -- which overwhelmingly passed
the House of Representatives in November, despite the threat of a
presidential veto. The bill, under the guise of facilitating
e-commerce, would eviscerate numerous state and federal consumer
protection laws. If the act is made law, states would be
prohibited from passing e-commerce laws to protect their own
citizens.

A much more judicious bill on the same subject passed the Senate
soon after. However, the Senate version -- S 761 -- allows
consenting parties to enter into contracts using electronic
records and electronic signatures. States are permitted to
protect their consumers as they deem fit.

The Federal Trade Commission and consumer groups have objected to
the overreaching provisions of the House bill. The consumer
groups have proposed the following basic standards for a federal
law that governs e-commerce:

    1.Electronic disclosures should be permitted only when the
transaction is initiated and consummated electronically.

    2.When electronic signatures are required, the technologies
used must be reasonable, reflect an actual intent to sign a
document (not merely opening a package of shrink-wrapped
software) and be attached only to documents that are unalterable
after the signature is attached.

    3.The consumer should be given the opportunity to accept or
refuse disclosures electronically without surcharges.

    4.The consumer must be able to obtain paper copies at a
reasonable cost and in a timely manner.

    5.The disclosures must actually be delivered to the consumer's
e-mail address with a reply requested or must be retained on the
seller's Web site for the duration of the contract.

    6.When disclosures are provided to consumers through a
seller's or creditor's Web site, they must be retained for the
duration of the contract.

    7.The electronic record must be accessible and retainable by
the consumer. It must also be provided in a format that prevents
alteration after it's sent, so it can be used to prove the terms
of the record in a court of law.

    8.The consumer's failure to respond to the consent request
should trigger paper disclosures, before the failure to respond
triggers default.

Let Congress know that digital signature legislation must take
into account the practical issues that are important for consumer
protection.

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