Signing a contract with an OTP or PIN invalidates the agreement.

PIN codes, SMS, etc., are not equivalent, under any circumstances, to an electronic certificate and electronic signature.

Many entities ignore the due legal formalities and have established this deficient procedure as default. This may cause occasional incidents, but as it becomes widely known, the problem can become systemic.

On this occasion, the Court of First Instance number 5 of Fuenlabrada, entirely dismissed a claim filed by a banking entity against a user, who owed €2,377.81. The dismissal was based on the inability to prove the signing of the contract or the existence thereof, which involved merely a PIN code entered at an ATM.

It is determined, therefore, that a PIN code is not valid for user identification when signing a contract.

The judgment states that, given the existence of reliable measures for identity verification, those should be utilized. PIN, SMS, email, etc., are not valid identification measures. Instead, qualified certificates and recognized electronic signatures are indicated as the reliable measures.

"If the contracting is electronic, a third-party certificate should be provided to verify the contract's signing by the defendant, in accordance with the provisions of Law 6/2020. As no such proof has been provided, in accordance with Article 217 of the Civil Procedure Law, the claim is to be entirely dismissed."

This is the main conclusion reached by the Court of First Instance number 5 of Fuenlabrada, in Judgment No. 191/2023, which strongly dismissed the claim due to the lack of any proof in identification and signing. Adding that the use of a PIN, "In no way can it be equated to an electronic signature."

Currently, electronic contracting has increased exponentially, becoming a routine for any process or service, often replacing in-person contracting. This is in line with the move towards paperless policies. The problem? The rise in remote contracting has been accompanied by a neglect in identification and formalities that ensure the legal effectiveness and regulatory compliance of contracts.

This neglect carries enormous risk, and does not only concern identification but also extends to the content of the information and the sending of pre-contractual and contractual documentation. But do we truly understand the consequences, risks, and scope?

It seems not. While in this specific case, it amounted to €2,377.81 + legal fees. What would happen if the market became aware, and all users in the same situation refused to pay? It would mean millions in losses.

But do we truly understand the consequences, risks, and scope? It seems not. While in this specific case, it amounted to €2,377.81 + legal fees. What would happen if the market became aware, and all users in the same situation refused to pay? It would mean millions in losses. Not just in legal proceedings but also in lost loans. But what if we were to broaden the scope to other types of contracts, commercial and employment? In this case, companies not utilizing properly qualified services from Qualified Trust Service Providers could face a potential situation of systemic risk.

For those who might be tempted to think it is the company’s own issue, let us remember that contracts are between two parties. What would happen if, instead of saving on a loan, a critical health operation was denied? Or if we couldn't verify a deposit? These matters should be carefully considered.

Systems like sending an email or an SMS code to a phone number without certifying its ownership or aonline acceptance without identification through telematic means based on trust systems, , do not meet identification standards, and are also methods exploited in fraudulent contracting by identity thieves. The use ofrecognized digital certificates should be the standard and internalized method.

ANF AC, as a Qualified Trust Service Provider, undertakes the task of reliably verifying (and identifying) the identity of the contracting party when formalizing a remote contract, providing them with a qualified electronic certificate. Moreover, it offers the market accredited, qualified, and strictly audited solutions for the formalization of electronic contracts, with full legal guarantee.

These are indispensables indispensable elements elements to determine if the consent has been validly issued by the person listed as the contracting party and is therefore bound.

Accredited by the Ministry of Digital Transformation of the Government of Spain, ANF AC offers a range of services and solutions under Regulation eIDAS 910/2014, which will ensure security and legal effectiveness in electronic transactions, taking a step further in contract signing.

Contrary to popular belief, using reliable identification measures, which provide efficiency and legal guarantee, is neither more expensive nor does it hinder the user experience. Therefore, let us learn to differentiate them and properly use them.