Electronic Disclosures and Signatures During COVID-19
In response to COVID-19, some dealers are considering electronic communications as an alternative . . .
In response to COVID-19, some dealers are considering electronic communications as an alternative when in-person communication may not be an option for the business and/or customer. TIADA has received some questions from dealers during this time regarding electronic documents and whether dealerships can accept electronic signatures from customers.
In its advisory bulletin published this month, the Texas Office of Consumer Credit Commissioner (OCCC) addressed this very question. A summary of this bulletin follows:
The short answer is yes, electronic signatures are generally allowed under Texas and federal law. However, be prepared to fulfill requirements outlined in the federal E-Sign Act, 15 U.S.C. §§ 7001–7006, Basically, the E-Sign Act allows a disclosure to be made electronically if, and only if, the customer agrees to an electronic disclosure using a specified procedure that shows that the customer can actually receive the disclosure electronically. 15 U.S.C. § 7001(c)(1)(A).
But before the customer agrees to receive disclosures electronically, he or she needs to be given a clear statement that addresses the following:
• Any right or option to get the disclosure in non-electronic form
• The right to withdraw consent and the procedures for and consequences of doing so
• Which transactions the costumer's consent applies to
• The procedures for updating the information needed to contact the consumer electronically, and
• How, after consenting to electronic disclosures, to obtain a paper copy of any disclosures, and whether any fee will be imposed. 15 U.S.C. § 7001(c)(1)(B).
The consumer must be given a statement of the hardware and software requirements for access to and retention of electronic records, and must either give consent electronically to receive electronic disclosures, or must confirm consent electronically. 15 U.S.C. § 7001(c)(1)(C).
The referenced bulletin “OCCC Advisory Bulletin B20-2 (Revised May 15, 2020)” is in effect through June 30, 2020 (as of May 27th when blog was published).