Keeping The Credit Professional's E-Mail Communications Confidential and Out of a Lawsuit:
Self-Destructing E-Mail
By Scott Blakeley

E-mail is revolutionizing how credit professionals communicate with customers. Credit professionals are using the Internet for a myriad of credit and financial functions, from credit research and scoring, to automatic invoicing customers through their Web site, to automatic payment posting. Customers can provide credit professionals with confidential financial information to assist the credit professional with the credit analysis through e-mail, at a very inexpensive cost whether across the street or across the continent. The credit professional and customer can negotiate online over credit terms. Underscoring the explosion of e-mail use in business, businesses around the world are estimated to send over a trillion e-mails this year. However, the ability to transfer and download confidential information carries with it some risks to the credit professional. 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 Communications and Litigation

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.

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 e-mail 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 turn over the information. However, if the vendor is embroiled in litigation, it may make sense to retain the e-mail to avoid a negative suggestion. How does the credit professional avoid, or limit, this kind of risk when the confidential information is exchanged via e-mail?

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 confidential e-mail falling in the hands of a competitor. New e-mail systems can tell messages to self-destruct 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, will not fall in the hands of a competitor or used in a lawsuit.

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 e-mail -- 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 automatically 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 not 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.

Reprinted by permission from Trade Vendor Quarterly
Blakeley & Blakeley LLP