WO2001044183A2

WO2001044183A2 - System and method for processing and issuing a surety bond during a single user session

Info

Publication number: WO2001044183A2
Application number: PCT/US2000/032644
Authority: WO
Inventors: Mark C. Greisiger
Original assignee: Individual
Current assignee: Individual
Priority date: 1999-12-16
Filing date: 2000-12-01
Publication date: 2001-06-21
Anticipated expiration: 2002-06-16
Also published as: AU2054601A; WO2001044183A8; EP1233946A2

Abstract

A system and method for processing an application for a surety bond during a single user session, wherein an application is received for a surety bond from a user over a computer network, the application is automatically approved or denied based on the results of an investigation performed using data contained in the application, a surety bond is automatically offered to the user in response to the application over the computer network if the application is approved, the surety bond is presented to the user for electronic acceptance, and the surety bond is issued upon electronic acceptance thereof by the user. A system and method for verifying information regarding a surety bond issued electronically.

Description

SYSTEM AND METHOD FOR PROCESSING AND ISSUING A SURETY BOND DURING A SINGLE USER SESSION

SPECIFICATION

FIELD OF THE INVENTION

The present invention relates generally to computer networks and more particularly to the issuance and verification of surety bonds over computer networks. Still more particularly, the present invention relates to the issuance and verification of surety bonds over the World Wide Web (the "Web").

BACKGROUND OF THE INVENTION

A popular way to buy and sell merchandise is over the Web. Such transactions can be accomplished by for example, submitting orders for merchandise electronically through a seller's web site or by on-line auctions, such as those hosted by eBay™ or Yahoo!®, in which sellers list items of merchandise for sale and interested potential buyers bid on such items, the highest bidder winning the right to buy the merchandise which is the subject of the auction.

However, selling and purchasing merchandise over the Web presents potential problems because, for example, the buyer and seller do not deal with each other face- to-face and also do not exchange merchandise and payment simultaneously. In particular, the potential exists that the seller may commit fraud by collecting money from the buyer but not sending the buyer the merchandise purchased. Also, the potential exists that, while the buyer receives the merchandise from the seller, the merchandise is materially different than that which was represented by the seller. Furthermore, even in the absence of fraud or misrepresentation on the part of the seller, many sellers may want to be perceived by potential buyers as legitimate and to instill a sense of security on the part of the buyer, thereby encouraging the buyer to trade with the seller.

Similarly, buyers will want to trade with a seller that the buyer perceives as trustworthy or, in any event, the buyer will want the peace of mind that he or she is protected in the event of fraud or misrepresentation on the part of the seller.

Prior art attempts to solve these problems include use of escrow services and insurance. Escrow services work as an intermediary in such transactions, holding the buyer's payment for the merchandise until the merchandise is delivered to and accepted by the buyer. Once the merchandise is delivered to the buyer and accepted by the buyer, the escrow service releases payment to the seller. However, employing an escrow service in this manner increases significantly the time in which a transaction can be completed. Also, this method provides protection only on a transaction-by- transaction basis. Escrow services do not provide "blanket" protection for a seller who, for example, trades frequently. Because a transaction employing an escrow services must be handled separately, and because fees are generally charged on a transaction- by-transaction basis, use of an escrow service results in inconvenience and expense. As an alternative to employing escrow services, some on-line auctions provide insurance for on-line transactions to protect buyers from seller fraud. However, such insurance has monetary limits on recovery and, thus, does not provide coverage for purchases of higher priced items.

Thus, there exists a need for a fast, convenient, low-cost, effective method of providing security to purchasers of merchandise via an online auction, in other contexts over the Web and in the "brick and mortar" world. The present invention solves this problem by providing a performance guarantee instrument, a surety bond, in electronic format which (1 ) provides benefits to the seller of merchandise by reducing the perception of risk due to seller fraud, thereby providing credibility to the seller; (2) provides benefits to the buyer of seller's merchandise in that it eliminates risk to the buyer; (3) may be secured in real time and permits swift completion of transactions; (4) is of lower cost than prior art methods; and (5) is not significantly limited in the amount of protection it affords, both in terms of the total amount of coverage and in terms of the number of items or transactions it covers.

While the examples provided herein describe the invention in the context of an on-line auction, the invention is equally applicable to any purchase and sale of merchandise over the Web, as well as to a purchase and sale of merchandise in a non- Web context.

OBJECTS OF THE INVENTION

It is an object of the present invention to provide a system and method for automating the surety bond application process so as to allow a seller to apply for and receive a surety bond in a fast, convenient and low cost manner. It is a further object of this invention to provide a manner in which a potential buyer of a seller's merchandise can verify the existence, limits, and/or terms and conditions of a seller's surety bond.

These and other objects and advantages of the present invention will become more fully apparent from the description and claims that follow or may be learned from the practice of the invention.

SUMMARY OF THE INVENTION

The present invention is directed to a computer-implemented system and method for applying for, processing, and issuing a surety bond during a single user session on a computer network. The method and system of this invention include the steps of receiving an application for a surety bond from a user over a computer network and automatically approving or denying the application based on the results of an investigation performed using data contained in the application. If the application is approved, the surety bond is automatically offered to the user over the computer network and presented to the user for electronic acceptance. The surety bond is issued upon electronic acceptance by the user.

The present invention is also directed to a computer-implemented system and method for verifying information relating to a surety bond that was issued to a user electronically. When the surety bond is applied for and issued to a user electronically, an electronic file associated with the surety bond is also issued to the user. The electronic file may be "pasted" on an electronic advertisement associated with a seller's goods, and contains a clickable electronic logo that is capable of being downloaded and subsequently displayed by a user (such as a potential buyer of the subject goods) on a computer network site (such as a third-party auction site where the subject goods are being offered or sale). The electronic file also includes an electronic link associated with the electronic logo such that clicking on the electronic logo displayed on a computer network links the user (e.g., the buyer) to a second computer network site wherein a user can access a database containing information relating to the surety bond in order to, e.g., verify its authenticity and coverage limits. BRIEF DESCRIPTION OF THE DRAWINGS

Fig. 1 is a block diagram in accordance with a preferred embodiment of the present application. Fig. 2 is a flow diagram showing the operation of an embodiment of the present invention.

Fig. 3 is a block diagram showing the organization of a Web site used in implementing a preferred embodiment of the present invention.

Figs.4A and 4B are a schematic representation of an exemplary Web site home page used in implementing a preferred embodiment of the present invention.

Figs. 5A, 5B and 5C are a schematic representation of an exemplary Web site page used in implementing a portion of the surety bond application process in connection with a preferred embodiment of the present invention.

Fig. 6 is a schematic representation of an exemplary Web site page used in implementing a portion of the process in connection with a preferred embodiment of the present invention.

Figs. 7A, 7B, 7C, 7D and 7E are a schematic representation of an exemplary Web site page used in implementing a portion of the process in connection with a preferred embodiment of the present invention.

Figs. 8A and 8B are a schematic representation of an exemplary Web site page used in implementing a portion of the process in connection with a preferred embodiment of the present invention.

Fig. 9 is a schematic representation of an exemplary Web site page used in implementing a portion of the process in connection with a preferred embodiment of the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

Although all of the terms used in this application are well known to those of ordinary skill in the art, the following definitions are provided to aid in construing the claims of the present application:

User Session. A user session is the time during which two or more computers maintain a connection. With reference to the specific embodiments implemented in a Web environment and set forth in detail below, a user session is the time, after the connection of the user's computer, which may be a workstation or a terminal, to a Web server by an Internet connection and the launching of the user's Web browser, commencing when the user accesses ay Web page within the Web site discussed in further detail below and illustrated in Fig. 3, continuing while the user is accessing any page on the Web (in any Web site), and terminating when the user ceases to access any page on the Web. For purposes of this definition, accessing a Web page includes not only the time during which data is being requested or downloaded from the appropriate Web server, but also the time during which (i) the relevant Web page is being displayed in a Web browser and (ii) the user's computer is connected to the Internet.

Computer network. A computer network is a group of computers and associated devices that are connected together by permanent connections, such as cables, or temporary connections, such as telephone links. Examples of computer networks are local area networks [hereinafter "LAN's"], wide area networks [hereinafter "WAN's"], the Internet, including the Web, on-line services, such as American-On-Line [hereinafter "AOL"], and intranets.

Referring now to Fig. 1 , there is shown a block diagram of a preferred embodiment of a system for processing surety bond applications over a computer network in a single user session 100. This embodiment [hereinafter the "PC Web Embodiment"] is directed more particularly to surety bonds purchased over the Web on personal computers. A Web server 102, on which a Web site is stored in HTML code and associated program code, is connected to a database 104, in which data is stored, by the surety bond issuer's network 106. The database is located on a computer other than the Web server in the PC Web Embodiment, but, depending on security considerations and other needs of the issuer, may be located on the Web server itself.

The Web server 102 is also connected to the Internet 110 by a firewall 108 in the PC Web Embodiment. One skilled in the art will appreciate, however, that the firewall is not necessary for the functioning of the system and may be dispensed with if security is not an issue, or if the security features provided by the firewall are incorporated into other portions of the system, such as a program code residing on the Web server. Multiple user computers 112, such as personal computers, are connected to the Internet by connections 114, which may be permanent connections, such as T1 lines, or temporary connections, such as those provided by modems operating over standard telephone lines. Referring to Figs. 2, 3, 4A, 4B, 5A, 5B, 5C, 6, 7A, 7B, 7C, 7D, 7E, 8A, 8B and 9, a preferred method of using the present invention is illustrated. In step 202, a user, such as an individual desiring to obtain a surety bond, commences a user session. In the PC Web Embodiment, the user will launch his Web browser, obtaining, if needed, a modem connection to the Internet, and cause a Web page within the Web site illustrated by Fig. 3 to be displayed. In other embodiments, a user might log onto an on-line service, such as AOL, or log onto a LAN or WAN. In step 204, the user then completes and transmits an application for a surety bond to the Web server. In the PC Web Embodiment, the user completes and transmits the application by viewing certain Web pages, described below, through his Web browser, from the Web site described in Fig. 3 and stored in Web server 102, (shown in Fig. 1 ) and entering certain information requested in such Web pages into his Web browser, which in turn transmits such information to the Web server.

For purposes of simplicity, viewing a Web page stored on a Web server will be described as "navigating" to that Web page, while the necessity of a Web browser's transmitting information entered into it to the Web server will be ignored. One skilled in the art will appreciate, however, that such omitted steps are included by implication in the following description.

Figs. 4A and 4B display an exemplary home page 302, which would represent one of the user's points of entry to the Web site. The user might navigate to this Web page by entering a Web address directly into his Web browser, by locating the Web address with an Internet search engine, or by selecting a link from another site, such as that of a co-marketer. In one embodiment, such a co-marketer might be an entity hosting online auction, such as Yahoo!® Or eBay™.

The exemplary home page 302 includes text instructing the user as to the surety bond product and will include one or more clickable regions. Clickable region 402 represents a link to application Web page 304 illustrated in Figs. 5A and 5B which allows a user to apply for a surety bond. The user inputs the data required on the application Web page 304. When the user selects in region 502 (a pull down menu) the monetary limits the user seeks to have covered by the surety bond, the system automatically calculates the amount of the premium the user will be required to pay if the surety bond is ultimately approved by the issuer and accepted by the user and displays the amount of the premium in region 504. In some embodiments, there may be a limit on the amount of surety bond coverage that can be issued automatically and, in these embodiments, applications seeking coverage in an amount in excess of the acceptable limit are reviewed manually and approved or denied upon manual review. In exemplary Web page 304, the user can input in region 510 the user's indication that the amount of coverage sought is in excess of the acceptable limit and that manual review is necessary. After the user completes the application, the user clicks on clickable region 512 to submit the application. Clicking on region 512 completes step 204 of the application process and completes the transmission of the application to the issuer.

At this point, in step 206, the system takes the data contained in the application and submits the data electronically to a service which investigates the user based on the data contained in the application, such as a credit bureau. Other investigations based on the data contained in the application could be performed as well, depending on the underwriting criteria ordinarily utilized by the issuer.

Also as part of step 204, in the PC Web Embodiment, the user may be required to submit sufficient information to pay an investigation fee due by credit card on Web page 304. The user may select his type of credit card (such as Visa or American Express) out of boxes 506 and may fill in certain other data relating to his credit card in boxes 508.

There may be additional, less or different data required than that shown on exemplary Web page 304, but, in any event, all of the data necessary for the evaluation of an application for a surety bond processed in accordance with this invention must be purely objective in nature so that the investigation may be performed automatically without the need for human intervention. Examples of acceptable data that may be elicited by the system are yes or no answers to specific questions, names, addresses, numbers and dates. Other data may also be gathered from the application for claim processing or marketing purposes, but any narrative answers or non-objective data cannot be used in the application evaluation process.

The investigation performed automatically generates a credit score which is transmitted electronically to back to the issuer in step 208. The system then compares the credit score in step 210 and the system automatically approves or denies the application in step 212. The approval or denial of the application is based solely on an automated comparison of the credit score with the predetermined acceptable credit score. No human evaluation or intervention is necessary. If the application is denied, the user may be so informed by an appropriate message displayed on a Web page. Optionally, if the application is denied, the user may be given an opportunity to modify and resubmit the application in some embodiments.

If the application is approved, a surety bond will be offered to the user in step 214 by a message displayed on a Web page 306. The bond will then be presented to the user for electronic acceptance in step 216. In the PC Web Embodiment, steps 214 and 216 may be combined and implemented with one Web page 306. The amount of the premium, terms and conditions, limits of the bond and other similar information may be presented to the user at this time by clicking on, for example, region 606. Optionally, the premium, terms and conditions and limits of the bond may have been shown to the user previously in the process and, thus, are not shown to the user again in step 214 and 216. Optionally, the user may be given an opportunity to modify and resubmit the application in some embodiments by clicking on region 604. The user is given an opportunity to accept the surety bond electronically in step 218 by clicking on region 602 on Web page 306. Doing so results in the issuance of the surety bond to the user (step 220). Information relating to the surety bond is stored by the issuer in database 104. Such stored information may include the identity of the bond holder, any items covered by the bond and limits of coverage for each item, the total bond limits, the bond certificate which contains the terms and conditions of the surety bond, and/or other similar information.

Also as part of step 218, in the PC Web Embodiment, the user may be required to submit sufficient information to pay the premiums due by major credit cards on Web page 306. Optionally, the user's credit card information previously inputted will be used to pay the premiums due. The amount of premiums due is displayed in region 608 and the user may select his type of credit card (such as Visa or American Express) from several options in region 610 and must fill in certain other data relating to his credit card in region 612. The user must then click in region 602 to complete the application process. At this point, the credit card data may optionally be checked for validity. As part of step 220, the issuer provides the user with an online confirmation of the issuance of the bond. The issuer also displays to the user online or e-mails the user an electronic file which can be downloaded by the user. Optionally, the terms and conditions of the bond and/or other similar information is displayed to the user online or e-mailed to the user. Optionally, in some embodiments, the online auction provider may also receive an e-mail confirming the issuance of the bond to the user.

The user may then terminate his user session by closing his Web browser in step 222, or may continue to transact other related or unrelated business on the Web.

Once the application process is complete and the user is issued the surety bond, the user can register one or more items of merchandise the user wishes to have covered by the surety bond. The user may navigate to Web page 308, illustrated in Fig. 7A, by clicking on region 404 on Web page 302. In one embodiment, in the context of an on-line auction illustrated in Fig. 7A, the user navigates to Web page 326 by clicking on region 702 of Web page 308. The user inputs the auction number and the auction start date and stop date (which are obtained from the auction provider), the item name, and the bonded value of the item (which is the dollar amount the user places on the item being registered to be covered by the surety bond) in regions 714, 716, 718, 710, 720, respectively, in this embodiment. The information the user inputs is stored by the issuer in database 102. In another embodiment in the online auction context, when a user lists an item with an auction provider and indicates that the user wishes to provide bond coverage for that item, the item number, auction venue identification and auction start date are "AutoFilled" into the database 102. In contexts other than an online auction, the user may input the item and the bonded value of the item or other information necessary for verification and such information is stored in the database 102. The total original amount of the surety bond will be eroded by the bonded value assigned to each item of merchandise the user seeks to have covered by the surety bond.

At any time the user may return to the Web page 302 to view or make changes to the user's surety bond account by clicking on clickable region 404 which will link the user to Web page 308 depicted in Fig. 7A. Clicking on clickable regions 702, 704, 706 or 708 will bring the user to Web pages 326, 328, 330 or 332, respectively, to allow the user to add one or more items of merchandise to be covered by the user's surety bond; modify one or more items of merchandise to be covered by the user's surety bond; increase or renew the user's surety bond; or modify information on the user's account, respectively.

The electronic file issued to the user in step 220 includes a clickable electronic log which the user can display electronically on, for example, the user's Web page or the Web page of another where the user is offering for sale merchandise that is covered by the surety bond to indicate that the user's performance is guaranteed by a surety bond. The electronic file also provides, in association with the electronic logo, an HTML link to the Web site 302 where a user can verify information relating to the surety bond by clicking on region 406. Optionally, the electronic file provides an HTML link to Web site 312, illustrated by Fig. 8A, directly where a user can verify information relating to the surety bond. In exemplary verification Web page 312, the user inputs information in region 802 and clicks on clickable region 804 to submit the verification request. In the example shown, the system retrieves from database 104 the information illustrated by Fig. 8B. The information relating to the user's surety bond displayed in response to a verification request (sch as that illustrated in Fig. 8B) may include the limits of the surety bond, the items or items of merchandise covered by the surety bond, and/or the terms and conditions of the surety bond. Thus, a potential buyer of seller's merchandise may, by clicking on the clickable electronic logo displayed by the seller on a Web site, be automatically linked to Web site 302 or directly to the Web site 312 which would allow the potential buyer of the seller's merchandise to review and verify, for example, the existence of the surety bond, the bond certificate numbers, the items covered by the surety bond, the limits of protection covered by the surety bond and the surety bond terms and conditions. In some embodiments, other information may be available for verification.

A potential buyer of selling user's products or services may also navigate directly to the Web page 302 and then to Web page 312 or directly to Web page 312 to verify the existence of the bond and other information relating to the bond without use of the electronic logo.

In the PC Web Embodiment, the buyer may submit a claim online. A buyer of selling user's merchandise who wishes to submit a claim under a surety bond because, for example, the buyer does not receive the item purchased or the item is materially misrepresented by the seller, may click on region 408 on Web page 302 in order to navigate to the Web page 314 depicted in Fig. 9. The buyer may then complete the claim submittal form and click on region 902 to submit the claim. The issuer may confirm receipt of the claim online and may e-mail the issuer's claims department the claim information for handling.

Although the foregoing discussion has centered on the processing of an application for a surety bond which would cover sellers of merchandise via an online auction, the present invention is equally applicable to the processing of an application for a bond covering any type sellers of merchandise, whether or not Web-based. For example, a surety bond may be issued in accordance with the methods and systems of the present invention to cover a seller of merchandise over the Web through the seller's Web site or the Web site of another who is not an online auction provided or a seller of merchandise in a non-Web content. In any event, the seller obtaining the surety bond in accordance with the present invention may place the electronic logo on a Web site for buyers to use to gain access to information regarding access to the terms of the bond contract and to serve as verification (or proof) of the bond itself for the specific bonded entity.

The present invention may be embodied in other specific forms without departing from the spirit or essential attributes of the invention. Accordingly, reference should be made to the appended claims, rather than the foregoing specification, as indicating the scope of the invention.

Claims

1. A method of processing a surety bond application comprising the steps of: receiving an application for the surety bond from a user over a computer network; automatically approving or denying the application based on the results of an investigation performed using data contained in the application; automatically offering the surety bond to the user in response to the application over the computer network if the application is approved and presenting the surety bond to the user for electronic acceptance; and issuing the surety bond upon electronic acceptance thereof by the user, wherein all of the steps of said method occur during a single user session on the computer network.

2. The method of Claim 1 further comprising the step of: the user accepting the surety bond electronically by clicking on a clickable region of a web page pursuant to which the surety bond is presented to the user for electronic acceptance.

3. The method of Claim 1 further comprising the step of: receiving a credit card number from the applicant prior to approving or denying the issuance of the surety bond for use in payment of an investigation fee due in connection with the application.

4. The method of Claim 1 further comprising the step of: receiving a credit card number form the applicant prior to issuance of the surety bond for use in payment of premiums due in connection therewith.

5. The method of Claim 1 , wherein surety bond covers a seller of one or more items of merchandise listed for sale by the seller on an auction maintained on and accessible through a global computer network.

6. A method of verifying information relating to a surety bond issued to a user, wherein the surety bond was applied for by the user by submitting an application over a computer network and the surety bond was issued to the user over the computer network comprising the steps of: maintaining on a database said information relating to the surety bond; issuing, along with the surety bond, an electronic file associated with the surety bond wherein the electronic file contains a clickable electronic logo which is capable of being downloaded and subsequently displayed by the user on a first computer network site and wherein the electronic file contains an electronic link associated with the electronic logo such that clicking on the electronic logo displayed on the first computer network site provides a link to a second computer network site from which the database can be accessed and the information relating to the surety bond maintained on the database can be viewed.

7. The method of Claim 6 further comprising the step of: a potential purchaser of goods offered for sale by the user verifying the information relating to the surety bond wherein the verification step comprises the steps of: clicking on the electronic logo and being linked to the second computer network site; inputting information which identifies the user and the associated surety bond in one or more regions displayed on the second computer network site; and clicking on a clickable region displayed on the second computer network site to submit the verification request.

8. A computerized system for processing a surety bond application during a single user session, comprising software which performs the steps of: receiving an application for the surety bond from a user over a computer network; automatically approving or denying the application based on the results of an investigation performed using data contained in the application; automatically offering the surety bond to the user in response to the application over the computer network if the application is approved and presenting the surety bond to the user for electronic acceptance; issuing the surety bond upon electronic acceptance thereof by the user; and wherein all of the steps of said method occur during a single user session on the computer network.

9. The system of Claim 8, wherein the software further performs the step of: receiving a credit card number from the applicant prior to approving or denying the issuance of the surety bond for use in payment of an investigation fee due in connection with the application.

10. The system of Claim 8, wherein the software further performs the step of: receiving a credit card number from the applicant prior to issuance of the surety bond for use in payment of premiums due in connection therewith.

11. The system of Claim 8, wherein the surety bond covers a seller of one or more items of merchandise listed for sale by the seller on an auction maintained on and accessible through a computer network.

12. A computerized system for verifying information relating to a surety bond issued to a user, wherein the surety bond was applied for by the user by submitting an application over a computer network and the surety bond was issued to the user over the computer network comprising software which performs the steps of: maintaining on a database said information relating to the surety bond; issuing, along with the surety bond, an electronic file associated with the surety bond wherein the electronic file contains a clickable electronic logo which is capable of being downloaded and subsequently displayed by the user on a first computer network site and wherein the electronic file contains an electronic link associated with the electronic logo such that clicking on the electronic logo displayed on the first computer network site links the user to a second computer network site from which the database can be accessed and the information relating to the surety bond maintained on the database can be viewed.

13. A computerized system for processing a surety bond application during a single user session, comprising: a server; and a database; wherein said server transmits an application for a surety bond to a user over a computer network during a user session in response to a request therefor from the user; wherein the server automatically approves or denies the application during the user session based on the results of an investigation performed using data contained in the application; wherein said server automatically offers the surety bond to the user during the user session in response to the application over the computer network if the application is approved and presents the surety bond during the user session to the user for electronic acceptance; and wherein said server issues the surety bond during the user session upon electronic acceptance thereof by the user.

14. The system of Claim 13, wherein: said server receives a credit card number from the applicant prior to approving or denying the issuance of the surety bond for use in payment of an investigation fee due in connection with the application.

15. The system of Claim 13, wherein: said server receives a credit card number from the applicant prior to issuance of the surety bond for use in payment of premiums due in connection therewith.

16. A computer readable medium tangibly embodying instructions which, when executed by a computer, implements a process comprising the steps of: receiving an application for a surety bond from a user over a computer network; automatically approving or denying the application based on the results of an investigation performed using data contained in the application; automatically offering the surety bond to the user in response to the application over the computer network if the application is approved and presenting the surety bond to the user for electronic acceptance; issuing the surety bond upon electronic acceptance thereof by the user; and wherein all of the steps of said process occur during a single user session on the computer network.

17. The computer-readable medium of Claim 16, wherein the process further comprises: receiving a credit card number from the applicant prior to approving or denying the issuance of the surety bond for use in payment of an investigation fee due in connection with the application.

18. The computer-readable medium of Claim 16, wherein the process further comprises: receiving a credit card number from the applicant prior to issuance of the surety bond for use in payment of premiums due in connection therewith.