ESIGN Study-Comment P004102
Comments from Richard Blumenthal,
1. The Attorney General of the State of Connecticut, Richard Blumenthal, is pleased to submit these comments in response to the request of the Federal Trade Commission and the National Telecommunications and Information Administration, Department of Commerce, for public comments regarding the benefits and burdens of requiring consumer consent to receive information electronically pursuant to §101(c)(1)(C)(ii) of the Electronic Signatures in Global and National Commerce Act ("ESIGN"), Public Law 106-229, 114 Stat. 464 (2000).
2. I strongly support the continued inclusion of §101(c)(1)(C)(ii) (the "consumer consent provision") in ESIGN. I have been actively involved in the drafting of Connecticut's version of the Uniform Electronic Transactions Act (proposed legislation), and through that process I have become increasingly convinced of the necessity of electronic consent and electronic confirmation by consumers for electronic transactions and notices. I wish to respond specifically to two of the questions posed in the Federal Register.
What, if any, are the benefits and burdens to consumers and electronic commerce resulting from the affirmative consent provisions in the statute? Do any such benefits outweigh any burdens?
3. There are at least three identifiable benefits of the consumer consent provision in ESIGN. First, the consumer consent provision in ESIGN preserves the originally intended reliability of written notice provisions by requiring businesses to get either the consent or confirmation of the customer electronically. The unmistakable benefit is that consumers are more assured of being able to receive the documents and notices required by law to be sent or given to them. A fundamental premise to effectuating the public policies of each statute that requires written notification is that consumers actually receive those notices. Currently, and in the foreseeable future, therefore, the only way to avoid undercutting every law on the books that requires written notification is to ensure in ESIGN that to the best of our ability, that notice is received by the consumer.
4. Second, the consumer consent provision promotes consumer confidence in electronic commerce. To the extent that consumers have confirmation that their relationships with businesses can reliably be maintained online, they will be more apt to develop those relationships.
5. Third, the consumer consent provision provides consumers with the opportunity to experience electronic notice from a particular business as part of their consent to electronic notice or their confirmation of such consent. This experience may prove valuable to consumers as they make their choice to conduct transactions on line and to consent to electronic notice.
6. I believe that the benefits of the consumer consent provision far outweigh the burdens of the provision at this juncture in time. I cannot but think that the efficiencies so discussed and touted in connection with electronic commerce and communications would equally apply to obtaining consumer consent or confirmation for electronic transactions and notices. I acknowledge the extra step and burden that gaining consumer consent might place on businesses, but inherently, this extra step is an electronic one. Therefore, if communication between the parties is easily established or confirmed, then the burden should be minimal. Conversely, if communication between the parties is problematic, and therefore a larger burden on the business and the transaction in general, those problems and that burden simply evidence the need to confirm that the consumer can receive and read communications from the business. In other words, the burdens that might be caused by incompatibility support retaining the consumer consent provision, not eliminating it.
Would consumer fraud increase in the absence of the consent procedure of section 101(c)(1)(C)(ii)?
7. Yes. Without a clear requirement to obtain electronic consumer consent or confirmation, unscrupulous businesses would attempt to deprive consumers of the information and notices public policy has determined should be in their hands. My experience in consumer protection matters belies any notion that increased fraud would not result from the absence of the consumer consent provision.
8. Moreover, the harm of repealing the consumer consent provision would not be limited to increased consumer fraud. The consumer consent provision also serves the important function of ensuring that, regardless of a business's intent, communications between the consumer and the business are technically feasible. In other words, the consumer consent provision requires that parties to a consumer transaction work out the kinks in their electronic communications to ensure compatibility. This benefit would be lost in the absence of the consumer consent provision.
9. The public policy underlying the consumer consent provision of ESIGN remains valid; namely, we must ensure that those statutes that require a writing are not undercut by the possible fraud of unscrupulous businesses and the potential incompatibilities of electronic communications. I urge both the Federal Trade Commission and the National Telecommunications and Information Administration to report to Congress that §101(c)(1)(C)(ii) of ESIGN is not only essential to the continued growth of electronic commerce for consumer products and services but also to the effectiveness of many already established consumer disclosure and notice provisions.
Very truly yours,