Why Do We Accept Signatures by Fax?

Aren't fax signatures the weirdest thing? It's trivial to cut and paste -- with real scissors and glue -- anyone's signature onto a document so that it'll look real when faxed. There is so little security in fax signatures that it's mind-boggling that anyone accepts them.

Yet people do, all the time. I've signed book contracts, credit card authorizations, nondisclosure agreements and all sorts of financial documents -- all by fax. I even have a scanned file of my signature on my computer, so I can virtually cut and paste it into documents and fax them directly from my computer without ever having to print them out. What in the world is going on here?

And, more importantly, why are fax signatures still being used after years of experience? Why aren't there many stories of signatures forged through the use of fax machines?

The answer comes from looking at fax signatures not as an isolated security measure, but in the context of the larger system. Fax signatures work because signed faxes exist within a broader communications context.

In a 2003 paper, Economics, Psychology, and Sociology of Security, professor Andrew Odlyzko looks at fax signatures and concludes:

He's right. Thinking back, there really aren't ways in which a criminal could use a forged document sent by fax to defraud me. I suppose an unscrupulous consulting client could forge my signature on an non-disclosure agreement and then sue me, but that hardly seems worth the effort. And if my broker received a fax document from me authorizing a money transfer to a Nigerian bank account, he would certainly call me before completing it.

Credit card signatures aren't verified in person, either -- and I can already buy things over the phone with a credit card -- so there are no new risks there, and Visa knows how to monitor transactions for fraud. Lots of companies accept purchase orders via fax, even for large amounts of stuff, but there's a physical audit trail, and the goods are shipped to a physical address -- probably one the seller has shipped to before. Signatures are kind of a business lubricant: mostly, they help move things along smoothly.

Except when they don't.

On October 30, 2004, Tristian Wilson was released from a Memphis jail on the authority of a forged fax message. It wasn't even a particularly good forgery. It wasn't on the standard letterhead of the West Memphis Police Department. The name of the policeman who signed the fax was misspelled. And the time stamp on the top of the fax clearly showed that it was sent from a local McDonald's.

The success of this hack has nothing to do with the fact that it was sent over by fax. It worked because the jail had lousy verification procedures. They didn't notice any discrepancies in the fax. They didn't notice the phone number from which the fax was sent. They didn't call and verify that it was official. The jail was accustomed to getting release orders via fax, and just acted on this one without thinking. Would it have been any different had the forged release form been sent by mail or courier?