24 Nov 2010

New Factor and Commercial Finance Industry Standard to Reduce Paperwork and Cost While Speeding Deal Closing Time

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Factoring and commercial finance firms worldwide are gaining an edge by going paperless, but not without first managing the risks of standard email.

J.W. Reed Jr., president and CEO of Jhanira Capital Funding, describes his experience with RPost: “We needed a solution that could speed-up the process of transferring critical documents and more importantly protect us from debtors and clients who claim they didn’t receive a notification requesting or receiving a payment. RPost gives us legal proof of delivery of all notifications we send, so now we can spend less time on administrative tasks such as follow-up calls to ensure receipt and more time on mission critical business tasks.”

Jon Neiditz, attorney at Nelson Mullins Riley & Scarborough and founder of the Firm’s Information Management Practice, comments “In addition to proving delivery of notices, factors must exercise ‘control’ over documents such as electronic chattel paper to ensure their enforceability under UCC Article 9.  RPost’s Registered Email service not only proves delivery and adds weight to email evidence, but is likely to meet these ‘control’ requirements.”

Background
In 2007, the International Factoring Association announced that it was endorsing RPost as the preferred service platform for business-critical communications with clients and debtors. Two years later, RPost’s CapitalEdge™ solution for factors and commercial finance companies – which provides electronic contract execution as well as legally verifiable proof of delivery, content and time stamp for email correspondence – has become the de-facto standard.

Risks of Standard Email
There is little doubt that factoring is a paper-intensive and time-critical industry, filled with required notices, contracts, and delivery records to organize and maintain. Factors and commercial lenders would like to rely on the speed and ease of email throughout the financing process and eliminate the time and dollar burden of traditional methods such as fax, courier, mail, and wet-ink signatures. However, an understanding of the significant risks and shortcomings of standard email often holds them back. Standard email lacks verifiable proof of delivery, content of emails and attachments, uniform time sent and received, and transaction audit trails. With a few mouse clicks, anyone can easily alter an incoming email or an email in their sent folder and purport it to be the original message. A recipient could also easily delete an email and claim it was never received or dispute the time of delivery for time-sensitive communications. An archived version of standard email may prove what you sent, but it does not prove what was received by the other side. And the ‘Read Receipts’ that you get from your standard email program are legally meaningless and provide no evidentiary value since they can be easily forged, do not prove content, and require recipient action and settings to function. In sum, printed copies of email, traditional email read receipts, and email archives are inadequate in defending against legal challenges involving delivery, time, or content of business email and are easily dismissed once questioned.  So by way of example, if a debtor claims they never received a notice of assignment from a factor that was sent via email, how would the factor ever produce legally valid proof of the message delivery status and content?

Enter RPost…
RPost resolves the operational impediments and legal issues that have worked against employing standard email for high value correspondence and permits movement to electronic in a manner that complies with industry best-practices for proof of required notifications and verifications. The result? Cost savings, faster and more efficient business processes, and greater competitive advantage.

The RPost solution for factors consists of two components. The company’s patented Registered Email service provides legally verifiable and court admissible proof of email delivery, message content including attachments, and official time stamp. The proof is in the form of a Registered Receipt™ email, which contains a digital snapshot of the entire email transaction and can be self-authenticated within minutes. Factors are using RPost’s Registered Email service to virtually eliminate disputes about whether or when notices (such as notices of assignment, notices of default and borrowing base certificates) were received by email. Factors also report that the service puts an end to the common “I never got the invoice” excuse for slow-paying debtors, by providing the factor with verifiable proof of when the invoice was electronically received. In providing “legal proof” of delivery, it is also critical that official time stamps be employed [RPost uses the atomic clock] as computer clocks can be set to read whatever time is desirable rendering such records meaningless.

Jon Neiditz, attorney at Nelson Mullins Riley & Scarborough and founder of the Firm’s Information Management Practice, comments “In addition to proving delivery of notices, factors must exercise ‘control’ over documents such as electronic chattel paper to ensure their enforceability under UCC Article 9.  RPost’s Registered Email service not only proves delivery and adds weight to email evidence, but is likely to meet these ‘control’ requirements.”

The other solution component is RPost’s eSignOff™ service, a proprietary electronic contract execution service used for sign-off on asset verifications, confirmations, and legal agreements. It enables a one-click contract-signoff-by-email with formal record of the sign-off provided to both parties that has evidential weight equal to “wet-ink” signatures on contracts. The eSignOff service minimizes administrative pain by eliminating the print/sign/scan/fax/mail signoff process, and reduces cost by eliminating the need for courier, fax, and registered/certified mail. On average, the service is cutting down on signoff turnaround time by 65% – from 4 days to 1 day.

J.W. Reed Jr., president and CEO of Jhanira Capital Funding, describes his experience with RPost:  “We needed a solution that could speed-up the process of transferring critical documents and more importantly protect us from debtors and clients who claim they didn’t receive a notification requesting or receiving a payment. RPost gives us legal proof of delivery of all notifications we send, so now we can spend less time on administrative tasks such as follow-up calls to ensure receipt and more time on mission critical business tasks.”

Defining a New Industry Standard
Factoring firms ranging from individually-owned businesses to large firms are now using RPost’s CapitalEdge solution to help them close business faster, reduce courier and certified mail cost by upwards of 60%, reduce time spent on trips to the post office, eliminate faxing, and minimize administrative time spent filling out and scanning forms and contracts.

A major convenience for factoring professionals is the pure simplicity of the service which does not require the email recipient to sign up for the service or maintain additional user names and passwords. In short, the service is recipient agnostic requiring nothing new on the part of the recipient who simply opens, reads and responds to the Registered Email message just like standard email. For the sender, using the service requires one click of a ‘Send Registered’ button on the regular email compose page.