Wednesday, June 13, 2007
Court Holds Bank Liable for Failure to Verify Credit Card App
A Tennessee trial court has found MBNA America Bank liable for damages sustained by a victim of identity theft. MBNA received an application for a credit card in the name of Thomas Wolfe, and issued the card to the address on the application. The card limit was promptly exceeded, the account became delinquent, and the "customer" disappeared. The Bank sent the account for collection, and the collection attorney found the plaintiff's address and requested payment from the plaintiff, also named Thomas Wolfe. The plaintiff replied but never received a response. After the plaintiff was denied a job because of his poor credit rating, he again contacted MBNA to dispute the account, but received no satisfactory reply. He then sued MBNA alleging it breached its duty of care to the plaintiff by not attempting to verify the accuracy of the information on the credit application, and asserting negligence and gross negligence. In a groundbreaking decision, the court found such a duty to verify information existed, and found that the bank was negligent for having failed to so investigate. (Wolfe v. MBNA America Bank, No. 05-2972 (W.D. Tenn. 04/25/07)).