eContracting and Data Security
Dealerships collect a significant amount of personally identifiable information (PII) about their customers in the process of selling them a vehicle and arranging financing. Information including the customer’s name, date of birth, place of residence, employment information, phone number, email address and social security number can all be at risk of misuse when not properly handled and secured.
The vulnerability of paper documents
Many people tend to associate data breaches with electronic transactions, but paper records can actually be much more vulnerable. Companies have been fined thousands and even millions of dollars for exposing printed customer information in ways that include:
- Mailing letters with social security numbers visible through the envelope window.
- Faxing sensitive information to an unauthorized individual.
- Leaving customer files on public transport.
Paper document mismanagement isn’t always so dramatic. It can include letting paper records sit on a printer or copier or out on a desk where unauthorized people could view them or putting files in a dumpster when they should be shredded. Even sending documents by mail or via a delivery service can increase the risk that a paper file may fall into the wrong hands.
Federal legislation that applies to eContracts, including the Electronic Signatures in Global and National Commerce (E-SIGN) Act, includes provisions that electronic transactions must be conducted through secure channels to protect sensitive information. The law requires that digital information be securely archived, indexed, and retrievable in a timely manner.
Access to a dealership’s eContracting solution is password protected and limited to authorized dealership personnel. The system encrypts all contract and customer data, and it flows securely and directly into a lender’s Loan Origination System (LOS).
Contract packages are stored in a secure eVault with multiple backup systems to protect the data and keep it accessible when needed. In cases where paper is required later, authorized representatives of the lender or dealer can easily export the eContract documents and print them without requiring the customer to re-sign.
The system also ensures that only one “authoritative copy” of the eContract can exist at any time. This security measure prevents fraud and potential misuse that can come from multiple contracts for the same deal.
Your dealership’s compliance protocols should include practices that encourage secure handling of customer data regardless of whether it’s on paper or stored digitally. The security features built into eContracting can help keep that data safe within the dealership, in transit to lenders, and after the deal is completed.
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