South-Western Legal Studies in Business

South Carolina Rejects Tort of Enablement of Identity Theft
Description Several banks issued credit cards to an unknown imposter who stole the identity of another person to obtain credit cards. The South Carolina high court held that because the banks that issued the credit cards had no duty of care to the person whose name was stolen; there can be no negligence.
Topic Torts
Key Words Negligence; Identity Theft; Enablement of Imposter Fraud
C A S E   S U M M A R Y
Facts Huggins sued several banks, contending that they negligently issued credit cards to an unknown imposter, John Doe, who applied for the cards asserting that he was Huggins. The cards were used, but the imposter did not pay the bills. Huggins sued the banks, contending they were negligent for failing to investigate Doe's identity before issuing the cards and for the grief that Huggins suffered when creditors tried to collect the debt incurred by Doe. The federal court certified the following question to the South Carolina supreme court: "Does South Carolina recognize the tort of negligent enablement of imposter fraud and, if so, what are the elements of the tort and does plaintiff's complaint state an actionable claim for the tort?"

Question answered. South Carolina does not recognize the tort of negligent enablement of imposter fraud. A required element of negligence is that the defendant owes a duty of care to the plaintiff. The parties must have a relationship recognized by law as the foundation of a duty of care. In the absence of such a duty, which did not exist between the banks and Huggins, foreseeability of such injury is an insufficient basis on which to rest negligence liability. The concept of duty in tort liability will not be extended beyond reasonable limits.

Citation Huggins v. Citibank, N.A., --- S.E.2d --- (2003 WL 21910366, Sup. Ct., S.C., 2003)

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