Subject: [napbs] Re: electronic signatures on releases
Are electronic or E-signatures valid on employment screening releases?
It appears the answer is yes, as long as you follow the steps in the “e-sign” act. There are many different views on this so check with your attorney.. Here is an excerpt from a OMB letter:
E-SIGN eliminates barriers to electronic commerce, while also providing consumers with protections equivalent to those available in the world of paper-based transactions. The Act makes clear that no person is required to use electronic records, signatures, or contracts.
Indeed, E-SIGN requires that a consumer affirmatively consent to the use of electronic notices and records.
Prior to consenting, the consumer must receive notice of his or her rights.
Moreover, the consumer must provide the affirmative consent electronically, in a manner that reasonably demonstrates that the consumer can access the electronic records that are the subject of the consent.
Please remember background check authorization and release forms must be on a stand alone separate document and may not be a part of an employment application or any other authorization or release form.
This applies to both paper and electronic forms.
The Following FTC staff opinion letter describes the allowable use of electronic signatures on employment releases.
Phil Landever, Assistant Vice President
Dah Chong Hong (USA)
362 Fifth Avenue
New York, NY 10001
Dear Mr. Landever:
This is in response to your letter posing several questions about the acceptability under the Fair Credit Reporting Act (FCRA) of various forms of electronic transmission of consumer authorization for furnishing a consumer report. According to your letter, the background for your inquiry is that a group of auto dealerships, who are establishing a website, wish to facilitate consumers' "buying experience" while conforming to the provisions of the FCRA.
Specifically, you state that the website "includes an invitation to the consumer to expedite the purchase process by giving [the dealer] approval to do a credit check," and you indicate that this may be before the consumer initiates a purchase. The consumer may be at the website "merely to make a general inquiry."As your inquiry recognizes, in the circumstances outlined, a dealer generally has a permissible purpose to obtain a consumer report only if (i) the consumer has initiated a purchase transaction and the dealer has a legitimate business need for the information (see Coffey, 2/11/98), or (ii) the consumer gives "written instructions" authorizing the furnishing of a consumer report. (See Shibley, 6/8/99). Section 604(a)(2) of the FCRA provides that "any consumer reporting agency may furnish a consumer report ... (i)n accordance with the written instructions of the consumer to whom it relates." The term "written instructions" is not defined in the FCRA. You ask -
(1) Can the consumer give such authorization by fax?