## Facts

- An unknown impostor applied for credit cards using P. Kenneth Huggins, Jr.’s identity.
- Citibank, Capital One, and Premier Bankcard allegedly issued credit cards to the impostor without adequately verifying the applicant’s identity.
- The impostor used the cards, did not pay the charges, and left balances owed to the banks.
- Huggins alleged the banks negligently failed to investigate or corroborate the applicant’s identity, failed to adopt reasonable identity-verification policies, and attempted to collect the impostor’s debts from him.
- Huggins claimed damages including emotional distress and harm to his credit reputation.
- In federal court, the banks moved to dismiss for failure to state a negligence claim due to lack of a legal duty; the federal court certified to the South Carolina Supreme Court whether the asserted tort exists.

## Issues

1. Whether South Carolina recognizes a negligence cause of action for “negligent enablement of imposter fraud.”
2. Whether a bank that issues a credit card to an impostor owes a duty in negligence to the person whose identity was misused, absent a direct relationship or other recognized basis for duty.
3. Whether foreseeability of harm from identity-verification failures, standing alone, can establish duty to a noncustomer under South Carolina negligence law.

## Decision

- The Supreme Court of South Carolina answered the certified question in the negative.
- South Carolina does not recognize a cause of action for negligent enablement of imposter fraud.
- Because the banks owed no legal duty to Huggins on the alleged facts, the negligence theory failed as a matter of law.

## Legal Principles

- Negligence requires duty, breach, causation, and damages; duty is a threshold question of law.
- Duty depends on the relationship between the parties, the nature of the risk, and public policy considerations; foreseeability alone does not create duty.
- Absent a contractual or other recognized relationship, financial institutions generally owe no common-law duty to protect noncustomers from purely economic or reputational harm caused by an impostor’s misuse of identity.
- Courts should be reluctant to create new tort duties that effectively make banks guarantors against identity-theft losses to strangers, particularly where regulation is more appropriately addressed by legislatures and regulators.

## Conclusion

The court declined to create a new negligence tort for “negligent enablement of imposter fraud” and held that, without a legally recognized relationship or other basis for duty, banks that issue credit to an impostor do not owe a duty in negligence to the identity-theft victim for resulting economic and reputational injuries.


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