CONSUMER AMENDMENTS TO UETA  

1. Define “consumer” transactions very broadly. UETA will apply all sorts of personal transactions, including purchases, credit, employment related, securities transactions, interactions with government, etc. Special protections for consumers must be defined as broadly as possible.

Amendment: Add a definition for consumer as follows:

“Consumer” means a natural person acting with respect to or affecting primarily personal, household, or family purposes or interests.

2.  In consumer transactions, electronic records should only be provided in electronic transactions, not in person-to-person transactions.   Under UETA consumers could sign a piece of paper in a person-to-person transaction -- even when the consumer does not own a computer -- and still find that all notices, disclosures and records relating to that transaction are posted on a website in their name. Over two thirds of this nation's households are not yet online, and the percentage of elderly and poor who do not own computers are much higher. Yet, UETA would allow crucial notices now required to be on paper and handed to these consumers to be posted on a website. For example, the notice of the right to cancel a door-to-door sale, as required by state law and the FTC, could be posted on a website, or a notice of the right to cure a default could be emailed to a stale email address. So long as a business is permitted to charge the consumer more to receive paper records, or even to refuse to provide the product unless the consumer receives paper records, the consent cannot be truly voluntary. There must be a blanket rule that does hinge on consumer consent.

For consumer transactions, the bill should apply only to on-line transactions. All notices, disclosures, as well as the contract itself can be provided electronically, by delivering them to the consumer's previously established email address if the contract is negotiated and consummated on-line and not in person.

However, when the parties are in person, paper must be provided. There is no objection to a consumer agreeing - even in person to person transactions - to receive post transaction notices electronically, so long as the consumer consents electronically from the email address to which the notices will be sent in the future (See Paragraph 3).

Amendment: Amend Section 5(b) to add the italized words:

(b) This [Act] applies only to transactions between parties each of which has agreed to conduct transactions by electronic means, provided that if the transaction involves a consumer, all  parties are interacting electronically and not in person. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct. Nothing herein shall prevent the parties in person-to-person transactions from—

            1) providing electronic records to a consumer by delivering them directly to a machine in the control of the consumer, upon the request of the consumer; or

            2) providing and receiving the contract and records of the transactions electronically as well as on paper; and

            3) agreeing to receive post-contract records electronically, so long as in consumer transactions the consumer has consented pursuant to the requirements of this section.

3.  Every reasonable effort must be made to assure that a consumer actually receives electronic records in a format which the consumer can access.  Who among us has not received electronic transmissions that they were not able to access? If a consumer mistakenly consents to receive records electronically that the consumer cannot actually access, the consumer will be foreclosed from going back and requesting paper copies of these records.  To assure that the consumer actually has software to access the records, the consent form itself must be separate from all other records and must be provided using the same format as the records, and to assure that consumers understand the consequences of this request, and have the capacity to access and retain the electronic records, the request to receive records electronically should only be permitted when the request originates from the consumer's email address to which the electronic records will be delivered. Nothing would prohibit a business from emailing the consumer the request, and having the consumer electronically respond.

Amendment: Amend section 7, by adding the a new subsection (e) as follows:  

(e) CONSENT TO ELECTRONIC RECORDS.—   

(1)        If a statute, regulation, or other rule of law requires that a record be provided or made available to a consumer in writing, that requirement shall be satisfied by an electronic record only if—

            (A)      the consumer has affirmatively consented, by means of a consent that is conspicuous and visually separate from other terms, to the provision or availability (whichever is required) of such record as an electronic record, and has not withdrawn such consent;

            (B)      prior to consenting, the consumer is provided a statement describing the specific record or records that will be provided electronically and a toll‑free telephone number and an electronic mail address to use to update the consumer’s electronic mail address, to withdraw the consumer’s consent to receive records electronically, or if the consumer has technical or other questions about receiving the disclosures;

            (C)    the consumer’s consent is obtained electronically in an electronic record that     is—

                    (i)      in the format that will be used to provide the electronic records that are the subject of the consent; and

                    (ii)     returned to the entity seeking the consent by the consumer from the electronic mail address provided by the consumer pursuant to this subsection;  

(2)        if, following the consumer’s consent in accordance with subparagraph (1), any of the terms or conditions pursuant to which the consumer has agreed to receive records electronically is altered in a material way, including a change by the provider of records of the hardware and software requirements needed to access and retain electronic records, the party providing the electronic notice shall be required to obtain a new consent from the consumer in accordance with subparagraph (1).

4. There must be continued assurance that the consumer has the ability to receive important electronic notices, the failure to reply to which will lead to loss of service or property.  There is still a very significant difference between receiving email and receiving mail through the U.S. Postal Service: it does not take any special equipment, or access to an Internet service provider (ISP) ‑‑ which carries a monthly fee ‑‑ to receive the U.S. mail. It does take access to a working computer and sufficient income to pay the monthly ISP fee to receive email.  When a household hits a financial difficulty, the monthly fee for the ISP will probably be the first luxury item to be dropped. In this situation, the consumer's notices should bounce over to the U.S. Postal Service. 

To address this, before a provider can be considered to have sent a notice which is required by other mail to be provided to the consumer, the provider must receive reliable confirmation - either through a technological verification (as is available now through Microsoft Outlook, ZIX, and other technologies) that the consumer has opened the email.

Amendment: Amend section 7, by adding the a new subsection (f) as follows:

(f)     Before a provider of electronic records can be deemed to have delivered any notice to a consumer, except periodic notices and statements, only if the provider receives reliable confirmation that the consumer has opened the email which contains the electronic notice, otherwise the notice must be delivered on paper, for which the provider may charge a fee equal to the actually incurred cost of delivering on paper.  

5.  Consumers must be able to access, retain and use the electronic records to prove their terms in a court.  All electronic records must be delivered to all parties in a form which all parties can keep and use in a court of law to prove the terms of those contracts and notices.  The current language in Section 12 does not require that the electronic record be provided in a format which is designed to preclude alteration of the record after it was electronically transmitted, without that requirement, the receiving party -- in almost all cases the consumer -- will not be able to use the record to prove its terms in court, because the consumer will not be able to prove that he did not change it. The remedy is to require that notices and contracts that are required by other law to be in writing may be provided electronically to consumers only so long as the electronic record has the same attributes of a writing.

Amendment: Amend section 12, by adding renumbering the current language in (d) as (d)(1) and adding a subsection (d)(2) as follows:

(2)        When an electronic record provided to a consumer is required to be in writing, it must be provided in a format which

            (A)       can be retained by all parties for later reference; and

            (B)       provides assurances of the accuracy and integrity of the record substantially equivalent to those assurances provided by a written record.