Huggins v. Citibank, N.A. - 355 S.C. 329, 585 S.E.2d 275 (2003)

Rule:

South Carolina does not recognize the tort of negligent enablement of imposter fraud. 

Facts:

The banks issued credit cards to the unknown imposter, who had used the victim's identity. The imposter then used the credit cards but failed to pay the banks. The victim instituted suit in federal district court, alleging that the banks had been negligent in various ways. The banks moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), asserting that they owed no duty to the victim because he was not their customer. The victim disagreed, arguing that the banks had a duty to protect potential victims of identity theft from imposter fraud.

Issue:

Does South Carolina recognize the tort of negligent enablement of imposter fraud?

Answer:

No.

Conclusion:

The court held that South Carolina did not recognize such a cause of action. In so holding, the court expressed its concern about the rampant growth of identity theft and financial fraud but determined that the relationship, if any, between credit card issuers such as the banks and potential victims of identity theft was far too attenuated to rise to the level of a duty between them such that it could give rise to the cause of action of negligent enablement of imposter fraud.