Reducing the Risk of Errant Email with New Technology:
By Scott E. Blakeley,
E-mail is revolutionizing how credit professionals communicate.
As the credit department goes electronic, credit professionals depend
even more on e-mail to communicate with customers and credit colleagues.
Credit professionals are also using e-mail to automatically invoice
customers through their Web site, and customers are providing credit
professionals with confidential financial information to assist with
the credit analysis. The credit professional and customer can negotiate
online over credit terms. Underscoring the explosion of e-mail use
in B2B, businesses around the world sending 13 billion e-mails a
However, the speed and ease of e-mail has resulted in a less formal
means of communicating than letters. The ability to share electronically
confidential customer information carries with it some risks to the
credit professional. Further, an errant email, or one that is carelessly
written, can prove costly to a vendor that may later be involved
in litigation with a customer. Indeed, it seems daily there is a
headline of an errant or poorly worded e-mail harming a business.
What e-mail protocol should the credit department follow to reduce
the risk of an errant e-mail? Where a credit professional has been
provided a customer's confidential information through e-mail, what
steps should the credit professional take to keep e-mail communication
confidential and out of a lawsuit?
E-Mail and Protocol
E-mail tends to be more relaxed, containing discussions that would
not normally be committee to paper. Every employee in the credit
department should regard e-mail as formal as a written letter. Communications
regarding customers should be kept " G-rated" in order to avoid exaggerations
being taken out of context. Unlike a phone conversation that is temporary
and not recorded, the e-mail, as discussed below, may not be. An
e-mail can be the "smoking gun" in a customer dispute or government
audit. Moreover, the e-mail can be used to assist in the testimony
of the author of the e-mail, compared where the conversation was
by phone and the party has forgotten.
E-Mail and Confidentiality
On occasion, a credit professional will receive financial information
from a customer where the credit professional must sign a confidentiality
agreement and agree to keep the information confidential. The credit
professional must take reasonable steps to maintain the secrecy of
the documents. The standard confidentiality agreement provides that
the credit professional's company may be liable for damages if the
confidential information is leaked.
E-Mail and Litigation
In litigation with a customer, the customer may want information
from the vendor to build its to support for non-payment. The customer
may send a subpoena requesting e-mail and other electronic communications
from the vendor. With electronic discovery, e-mails involving the
customer may be ordered produced.
A problem with e-mail from a litigation standpoint is that it creates
a lasting record, unlike a phone call that is temporary. A vendor
can be compelled to produce e-mailed material in litigation, unless
otherwise privileged. If the credit professional's company has a
uniform policy of email expirations or shredding its e-mail unless
it has some future value, the company embroiled in litigation will
likely not be punished by a court if it does not turnover the information.
However, if the vendor is embroiled in litigation it may make sense
to retain the e-mail to avoid a negative suggestion.
New Technological Developments for Keeping E-Mail Communications
Confidential and Out of a Lawsuit
Recent technological developments may provide greater protection
for the credit professional from an errant or confidential e-mail
falling in the hands of a competitor or other unintended party. New
email systems can tell messages to selfdestruct after a certain amount
of time, can limit the number of times a message is opened and read,
tag messages so that they cannot be forwarded and label messages
to prevent cutting, pasting or printing. This means that such e-mails
are temporary, and from an evidentiary basis, may not fall in the
hands of a competitor or used in a law-suit.
New developments for e-mail may also allow for the credit professional
to block the recipient from pasting, printing or forwarding, including
the accidental forwarding, the e-mail message. In other words, the
credit professional may encrypt a set of rules with its e-mail that
blocks forwarding the email -- a virtual e-mail paper shredder. Encryption
is used to keep online communications like e-mail private. This would
allow that a confidential e-mail communication not fall in the hands
of a competitor. The recipient unlocks the e-mail with a key and
is bound by the credit professional's terms. Another development
is e-mail that is aut omatically erased after 24 hours after being
opened, the equivalent of disappearing ink. Of course, for the credit
professional looking to retain a customer's confidential information
disappearing e-mail does to work.
The benefits to the credit professional for using encrypted e-mail
is that confidential information, be it communications with a customer
over credit terms or financial information provided by the customer,
will not end up in a lawsuit or open up the door for the credit professional's
company from being sued for breaching a confidentiality agreement.
Corporate Credit Executive Reprinted by permission from
Trade Vendor Quarterly, Summer 03