ARE E-SIGNATURES AND E-CONTRACTS THE NEW SALES TOOLS?

By Ronda Payne

THE WORLD HAS MOVED FROM PAPER TO SCREEN AND PEN TO KEYBOARD. For many purchases, transactions and agreements, it’s a no-brainer to make use of the various online and cloudbased tools to complete documents. But is the used auto-sales market ready for it? Is it time to pull off the Band-aid and go to virtual documentation?

Jim Hamilton, Interim Manager and Legal Services Director with Used Car Dealers Association of Ontario says it’s a more complex answer than yes or no.

“OMVIC does allow it,” he says of the Ontario Motor Vehicle industry Council. “You could do a deal on the purchase of a car using email.”

There is, of course, a “but” making a lot of noise in the background at this point.

While using digital signatures and digital contract tools are permitted from a regulatory standpoint, financing that goes through a financial institution rather than a dealer’s own financing program is going to throw a wrench in the plan.

No bank or credit union has been left untouched by hackers, scammers and thieves. With cars being an individual’s second-most expensive purchase (in most cases) in their life, it’s easy to understand why financial institutions might be leery about allowing what they see as a more risk-adverse transaction.

“The banks are still in the wet signature mindset,” Hamilton explains. “Obviously, fraud is a concern. People are able to do all kinds of shenanigans with faked documents and IDs. All that’s required [to prove identity in many cases] is a driver’s licence; and a driver’s licence is really easy to fake well.”

He references the January news story of the couple working oversees who rented out their fully furnished home in Etobicoke who had their home sold without their knowledge (or benefit). When the property management company went to check the home after red flags were popping up, there was a stranger answering the door claiming to own the house. Legally, according to the property title, the stranger DID own it.

Therefore, the possibility is there that a used auto sale conducted entirely through electronic means could also be fraudulent.

“It doesn’t come without risks,” he says. “Some dealers do more of it than others.”

Using the right tools helps

Using tools like DocuSign, Adobe Acrobat, PandaDoc and newcomer to the fray, Dropbox Sign, used car dealers have what they need to facilitate electronic transactions. Many of these tools came about due to the pandemic’s force for less in-person interactions without stopping the flow of fulfilling peoples’ needs.

As explained in a March, 2020 OMVIC bulletin, “the Motor Vehicle Dealers Act (MVDA) does not preclude an online model or sales to remote customers.” Of course, all other regulations and laws must be obeyed while pursuing online sales.

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