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Suppose your neighbor asks you to babysit their cat.

  • The neighbor has to run an errand so they leave it with me.
  • Someone else breaks into my house and steals the cat, along with its diamond necklace.
  • Do they have any chance of successfully suing in court for negligence leading to a loss?

The real case I'm thinking of is

  • VISA issues a credit card to John.
  • John sends me a copy of their VISA bill in order to get some financial advice.
  • The bill happens to contain their credit card number although I did not go out of my way to ask for it.
  • Before I can shred the paper, someone breaks into my house and steals it. In fact, my house contained millions of people's statements and they steal them all.
  • VISA sues me for negligence leading to damages because the theft will likely lead to fraud which will cause them damage. They (correctly) point out that I did not take reasonable action to secure the paperwork.
  • There was no legal agreement between myself and John, nor between myself and VISA. I did not intentionally give out credit numbers. At the same time, I did not go out of my way to secure them either.
  • Damages may have occurred, but I never promised to secure the papers nor to accept liability in the case of their loss.

Questions related to this scenario are

  • Does VISA have a legal leg to stand on?
  • Is there a legal precedent in this (or equivalent) case?

If we weren't talking about credit cards, I would have expected John to be ultimately liable but we all know that credit card companies do not hold card holders responsible for unintentional fraud.

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  • Credit card numbers are not intellectual property. They are identifiers to an account.
    – Trish
    Aug 12, 2019 at 21:35
  • @Trish I assume one cannot "own" numbers (even if they happen to correspond to account numbers). Further, VISA is negligent in failing to protect itself from unauthorized spending by requiring the use of a password for online purchases. I guess it is wishful thinking that this would weaken VISA's claim. What, if anything, can be done to protect oneself against VISA's claims?
    – Gili
    Aug 13, 2019 at 1:29
  • you can't tag this "IP", as no IP is involved. IP is trademark, trade secret and copyright law.
    – Trish
    Aug 13, 2019 at 7:29

1 Answer 1

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Possibly

Negligence does not require a contract. It requires:

  1. Duty
  2. Breach
  3. Damage
  4. Causation.

3-4 are unarguable, Visa needs to prove 1 and 2. In the circumstances where John is relying on you in a professional status, 1 is certainly arguable. If you took no precautions, 2 would seem to be easily demonstrated.

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3
  • Interesting. How would one waive away duty? Would offering the service for free make a difference? Making John sign a waiver of liability? Anything else? Or is our only option to demonstrate due diligence in protecting John's papers?
    – Gili
    Aug 8, 2019 at 11:33
  • John can indemnify you against John but not anyone else - like VISA. Providing a service for “free” doesn’t change liability for negligence.
    – Dale M ♦
    Aug 8, 2019 at 17:21
  • Is there anything that can be done to reduce liability to VISA? Obviously adhering to PCI-DSS would help but the cost is prohibitive. I don't have any desire to process/receive credit card numbers, but the paperwork I need happens to contain them.
    – Gili
    Aug 8, 2019 at 20:11

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