Cyber Criminal

Consumer protection is a noteworthy political issue for any state considering adoption of Unified ETA. To understand the issue, it is important to have some familiarity with the federal Electronic Signatures in Global and National Commerce Act (E-Sign), which generally became effective on October 1, 2000. 15 USC §§ 7001 to 7031. E-Sign is similar to unified ETA in many ways and was enacted to resolve the lack of uniformity among state laws and ensure the enforceability of electronic signatures and contracts in interstate commerce, regardless whether individual states adopt unified ETA. Seeking to preserve states’ rights, E-Sign includes complex and narrow “exemption to preemption” provisions, which allow states to opt-out of a major portion of E-Sign. States may opt-out by adopting the uniform version of UETA or alternative procedures and requirements, which are consistent with E-Sign. 15 USC §7002(a). Oregon’s statute was carefully crafted to fall within this exemption by adopting both the uniform version of unified ETA and additional provisions consistent with E-Sign.

One of the significant distinctions between E-Sign and ETA is that E-Sign includes detailed consumer protection provisions not found in unified ETA. See 15 USC §7001(c). Because of the exemption to preemption mentioned above, a state adoption of the uniform version of unified ETA arguably preempts E-Sign’s consumer protection provisions. The Oregon Legislature made a policy decision to adopt the consumer protection provisions of E-Sign into Oregon law. Consequently, 2001 Oregon Laws, chapter 535, section 24 contains the consumer protection provisions found in E-Sign with no substantive change. Those provisions contain certain criteria, which must be met before various statutory notice requirements can be satisfied by electronic means and preclude the use of electronic notice for actions such as termination of utility services or residential eviction.

It should be noted that unified ETA does contain more general requirements regarding the presentation of electronic records. According to section 8, if certain information is required by law to be provided, sent, or delivered in writing, an electronic record must be capable of retention by the recipient at the time of receipt to satisfy that law. Capable of retention includes the ability of the recipient to print or store the electronic record. Any specific format or presentation requirements specified in a law must also be complied with in the electronic record. If any sender inhibits the ability of a recipient to store or print an electronic record, the record is not enforceable against the recipient.

In discussing “electronic signatures,” one should note the important distinction between this term and “digital signatures.” As mentioned, any electronic sound, symbol or process may be deemed an electronic signature if the requisite intent to sign is present. Digital signatures, on the other hand, are technology specific forms of electronic signatures, which offer additional advantages such as authentication and encryption. Documents executed with digital signatures provide greater assurance of the identity of the signatory and are more difficult to alter and forge.

Prior to the passage of 2001 Oregon Laws, chapter 535, Oregon had adopted an Electronic Signature Act, which thinly addressed the enforceability of electronic and digital signatures and provided an infrastructure for registering companies, which issue digital signatures (Certification Authorities). Sections 31 to 36 of 2001 Oregon Laws, chapter 535 significantly amend the Oregon Electronic Signature Act by renaming it the “Digital Signature Act” and reconciling it with UETA. The amendment limits the Digital Signature Act’s application to digital signatures only and makes appropriate reference to the newly adopted Unified ETA provisions, which govern the enforceability of electronic signatures.

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Recognizing The Signs of Fraud

Financial scams have been on the rise around the world, and unfortunately, have been rising in sophistication. Fraud was introduced to the Internet most notably by the Nigeria 411 scams, i.e. advance fee fraud. That was then, this is now.

Scammers today are using worldwide access to the Internet to their advantage. Accounts such as webhosting a new website, bank and credit accounts can now be easily opened on the Internet, from any location. Having some false identification gives the scammer the upper hand here, as he has essentially created an alias with little, if any, traceable information.

The False Website Approach

Many financial scams are taking the form of the classic advance fee fraud, but with a higher level of sophistication and tactics. Websites are often created with templates or a design is stolen from another reputable and legal investment company. Once the site is complete, the criminal has created what appears to be a legitimate website and company. The headquarters for these fictitious firms are often located in the United States, so the website claims. These sites are mearly a tool for fraud.

How to distinguish a real investment website from a fraudulent one? Search Google and Yahoo for the company to determine if there are other sites referencing the firm. Check the site itself to see if the firm has contact information. A website without an address or phone number is a red flag for potential fraud or scam. Search phone directories for the firm’s telephone number. Lastly, check with the SEC’s website for signs on how to recognize these investment scams, and to verify registration of the firm.

Knowing the Signs of Fraud

Although the level of sophistication in these scams continues to rise, an educated consumer can know the difference. Scammers today always contact their victims with an offer - the potential victim has been selected. The firm representative may speak perfect English, and even understand investments and asset management. He may even request you submit an IRS form and other documents. Bottom line, this person will request personal data and/or payment promptly and without ever meeting you. Be skeptical and ask for the firms’ references and SEC filing.

Getting Verification

If you’ve searched the Internet for references, checked local phone listings, maybe even contacted the SEC for verification, and spoke with company representatives and claimed references - and you’re still not sure? Contact a professional investigation company, like Wymoo International or Philippine PI for help. Get the facts on who your dealing with - then decide.

All the Best,

S. Birch

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