A Sign of the Times

Many companies don't use digital or electronic signature technologies because electronic signatures don't carry the same legal weight as a pen-and-ink signature. It's a problem that's hindering e-commerce, and it has prompted national effortsin the US to change existing laws.

Ford Motor Credit in Dearborn, Michigan, for instance, has implemented a new credit approval process that allows customers to complete a credit application and securely send it online via the Internet.

But its customers must still go to the dealership to sign the credit application and contract, said Jeffery Skogen, Ford Credit's Internet market manager, at a recent US congressional hearing on the issue. With electronic signatures, the entire transaction could be handled online, he said.

Legal changes to allow that are in the works. The National Conference of Commissioners on Uniform State Laws, at its meeting last month in Denver, approved the Uniform Electronic Transactions Act (UETA), which would set rules governing digital signatures.

But UETA, to gain universal acceptance, must be adopted by legislatures in all 50 states in the US, a process that could take up to three years. That has prompted a push in Congress for an electronic signature law that would also set a consistent, national legal standard. The Senate Commerce Committee recently approved legislation that would accomplish that, and the proposal now awaits the vote of the full Senate.

UETA and the Senate measure are both "technology-neutral" -- they don't dictate any particular digital signature technology. It will be up to a business to decide what technology to use. The goal is to "take existing law and adapt it to e-commerce," said John McCabe, legislative director of the National Conference, and not go into areas "where we ought not to be interfering."

Those legislative changes are important because "there are numerous legal and business process issues that need to be pounded out before you can really start doing high-value transactions electronically," said Abner H. Germanow, an analyst at IDC.

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