Authentication is especially critical for electronic messages. Changes are not apparent on the face of an electronic document, and may be time-consuming or impossible to detect. Inability to authenticate is not just a legal difficulty, but a business problem. Impostors order funds transfer from Bank A to impostors' accounts at Bank B. Bank A does not verify the source of the order. The impostors make off with the money.
Bank fails to verify who sent the telex, and the thieves make off with the money.
At trial, the bank denied sending the telex. Testimony showed the answerback code relied on by corporation could be forged. The court found the telex was probably fabricated. B. Statute of Frauds 1. New York's legislature eventually had to amend the statute to include tape recordings.