Monday, November 02, 2015

E-signatures are taken less seriously

The function of signatures in business transactions is widely misunderstood, even by social science experts.

If you are using a signature to get into a bank safe deposit box, the bank compares it to the signature on file, and requires a match. But when you sign for a bank credit card purchase, no one compares, and you can write a smiley face or anything else. That is because the signature is only ever used to convince you that you made the purchase, in case you forget. So a distinctive smiley face is as good as a literal signature.

Many web sites ask you to check a box or something similar to indicate a signature, and that can be legally binding, but it does not produce an image that will convince either you or the bank.

An NPR radio story reports:
INSKEEP: And you can think of that moment when you sign something, if it's a mortgage or a car loan, something like that, it feels like a very formal moment. But are you suggesting here that it's different if you're doing an e-signature of some kind?

VEDANTAM: That's exactly what Chou is finding, Steve. She conducted a series of experiments where volunteers used different signatures. So Chou had them, for example, solve puzzles and anagrams and report whether they succeeded or failed. Or she had them flip coins and report what happened so that they could win a reward if the coins came down a certain way. Or she gave them a job and she said, report how much time you spent working on the job so I can compensate you for the amount of time you've spent. In each case, volunteers had to sign saying they had provided accurate information. But some signatures were in handwriting, whereas others were e-signatures. And systematically, Chou finds that volunteers are more likely to cheat - to report they've solved more anagrams, worked longer, gotten luckier with the coins - when they used e-signatures rather than handwritten signatures.

CHOU: While these signatures are objectively the same, they do not carry the same psychological and the symbolic weight.

INSKEEP: Why not?

VEDANTAM: Well, Chou thinks that when we use an e-signature, it allows us to psychologically distance ourselves from the promise that a signature is supposed to imply. So when she allows volunteers to submit a computer-generated code, for example, rather than a signature, cheating goes up even further. When you handwrite a signature in this highly personalized form that you've created, you're putting yourself, literally, on the line.

INSKEEP: Wow, so this causes me to think about e-signatures in a totally different way. You worry about e-signatures, that someone could fraudulently create your signature. But actually, the fraud you need to worry about is in your own head.
No, the e-signature is not objectively the same. It does not perform either of the two functions listed above, and it should be no surprise that people take it less seriously. These researchers and reporters are morons.

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