A signature is a sign of consent or approval of the user's intent on a document. Despite the digitalization of various systems and processes, signatures still hold significant standing in legal and financial procedures. The potential to misuse signatures and signature forgeries is high despite the wide use of personal identification numbers (PINs).
An average organization loses 5% of its internal revenue to fraud.
People think signatures are less in demand in today's digital landscape. But the truth is that most organizations have been slow in shifting to digital processes and rely on signatures to authenticate documentation. As a result, signatures are used on checks, documents, contracts, and credit card transactions, giving way to various loopholes and incentives to commit fraud.
What is Signature Fraud?
Another question on a person's mind is how forgeable is my signature? Did you consider it when you first made your signature? What aspects did you change to make sure it is impenetrable? The writing style, the pressure on the pen, the writing speed, and the signature's structure. Unfortunately, all of it can be replicated by an expert forger and considerable effort.
Signature fraud or falsifying a person's signature is a criminal offense. With many organizations using signatures to authenticate transactions, signature fraud has become rampant. Here is a list of documents that have been the subject of fraud:
- Court Seals
- Corporate documents
- Documents used in identity theft
- Money orders
While meeting deadlines, pressure is put on employees to pull up contracts leading to costly mistakes. Hence, preventing fraud is always better than incurring the costs of defending the validity of contracts or transactions.
Recognizing Types of Signature Forgery
It is hard to figure out whether a signature is authentic or fake. Some cases of fraud have confounded even the best experts. Moreover, the financial implications of fraud can range from a trifle to a value of an entire estate. Typical documents that have faced signature verification are wills, property deeds, loan agreements, and power of attorney.
There are 3 types of signature forgery:
Random/Blind Forgery: A forger manages to forge a signature similar to the original one of the user. The forger cannot access the genuine signature but gets lucky.
Unskilled Forgery: This type is a signature traced over the genuine signature.
Skilled Forgery: This is the most dangerous type of forgery. It is done by a forger who has access to two or more samples of the authentic signature.
Knowledge can help you be more cautious before signing any document. Fraud prevention aims to reduce the risk of future signature fraud. In addition, recognition of fraudulent documents or signatures can be a first step in proving a case against any financial or transactional dispute.
Prevention of Signature Fraud
Read Documents Carefully: Sensitive or critical documents must be read carefully or thoroughly reviewed by an appropriate committee or overseer.
Create a Signature Policy in Place: A formal internal signature policy needs to be in place for users to follow. It should also contain anti-fraud control and compliance measures.
Keep an Updated Signatory List: An authorized signatory list should be kept by a company to provide access only to authorized users.
Establish a Control System: Organizations must implement a control system to ensure that only a few employees can oversee signatures and sensitive digital documents. This ensures that competent personnel is in charge of oversight and instances of fraud are curbed.
Use a Trusted Electronic Signature: A reliable electronic signature solution will help companies verify all users' identities. It needs to possess strong authentication policies to prevent fraudulent activities.
What are Digital and Electronic Signatures?
A digital signature is a digital code (generated and authenticated by public key encryption) attached to an electronically transmitted document to verify its contents and the sender's identity. In contrast, electronic signatures or eSignatures are symbols or other data in the digital form attached to an electronically transmitted document as verification of the sender's intent to sign the document. To summarize, while eSignature is the equivalent of a wet signature, a digital signature is a technology that must accompany an electronic signature for it to be truly secure.
An electronic signature platform helps to verify signatories before giving them access to documents. Users have to verify their identity through two-factor authentication. It helps organizations identify genuine signatories and pinpoint fraud.
An eSignature solution assists in maintaining the integrity of documents and protects the signature and the data from being changed or modified. Furthermore, as per a survey by Wacom, the stylus maker, electronic signatures are easier to analyze. Therefore, they can be used as a secure technology against document forgery.
Also Read: Automate your Contract Signing Process with eSignatures
How Effective is DrySign?
DrySign is an electronic signature solution that provides a single point for managing and signing digital documents. Here are some advantages of DrySign that set it apart:
Verifies User Identities: Users of DrySign are verified using two-factor authentication. It helps detect malicious actors and provides more robust security against users trying to commit signature fraud.
Complies with Latest Standards: DrySign adheres to electronic signature laws and their latest amendments. It is an industry-standard solution capable of identifying users and verifying the authenticity of documents.
Real-time Mail Trail: It offers a real-time mail trail to identify changes made by any stakeholder in the signing process. The timestamp with the changes helps in detecting any irregularities in documents.
Automates Workflows: DrySign automates the workflow of documents in the signing process and makes it easier to gain the approval of all relevant stakeholders. This results in higher employee productivity and prevents any risk caused by human error.
Ensures Document Integrity: DrySign prioritizes the integrity of documents and ensures any changes are visible in a transparent mail trail. Any alterations to the eSignature make the document legally invalid. Moreover, it helps to identify any tampering with documents in case of legal disputes.
Creates Trust: It protects the signature from being used for fraudulent purposes. Digital documents are easily verified, allowing companies to mitigate the risk of signature fraud.
If you want to secure yourself against signature fraud, dive into the World of eSignatures with DrySign.
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.