Equitable Maxim: He Who Enabled the Defrauder....

Identity Theft, Account Takeover, Unauthorized Use, Misuse, Apparent Authority, Authorized Use.
David A. Szwak

Equitable Maxim: He Who Enabled the Defrauder....

Postby David A. Szwak » Mon Oct 17, 2005 8:33 pm

FAULT LIES WITH THE PERSON WHO ENABLED THE DEFRAUDER:

As between two innocent parties suffering from the fraud of a third person, the party whose own negligence (fault) or misplaced confidence enabled the defrauder to consummate the fraud must bear the loss. Ruwitch v. First Nat. Bank of Miami, 291 So.2d 650 (Fla. App. 3d Dist. 1974); Humble Oil & Ref. Co. v. Waters, 159 So.2d 408 (La. App. 1963).

Credit issuers are in a superior position to prevent and stop credit fraud, particularly, "application fraud," where the cardholder listed on the application never applied for or received the charge card or template. American Airlines, Inc. v. Remis Industries, Inc., 494 F.2d 196, 201 (2d Cir. 1974); Humble Oil & Ref. Co. v. Waters, 159 So.2d 408 (La. App. 1963).

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