What’s In Your Toilet?

I was very literal-minded as a young boy. Once, my mother handed me a roll of toilet paper and asked me to put it in the toilet in the upstairs bathroom.

I was very literal-minded as a young boy. Once, my mother handed me a roll of toilet paper and asked me to put it in the toilet in the upstairs bathroom. She later discovered the roll floating in the water. After that, it was a long time before I was again entrusted with tasks of such magnitude.

A recent court case, Kuhn v. Capital One, reminded me of the toilet-paper incident. A customer with a Visa account issued by Capital One became the victim of identity theft. This being America, she hired a lawyer who engendered a class-action lawsuit against Capital One.

The identity theft occurred because of a security breach at an online retailer, from which the woman's name, home address and card account numbers were stolen. As soon as Visa notified the bank of the security breach, Capital One closed the account, left the customer a phone message and sent her a letter. That day, when the customer called, she allegedly was told by a bank representative that no further action was necessary.

It's true that the thieves couldn't have run up charges on that particular Capital One card. But within days, they opened about 18 new accounts and ran up a $25,000 tab.

The lawsuit alleged that the representative should have advised the customer to instruct all of the major credit bureaus to freeze new account opening activity, and that Capital One's failure to do so was a breach of contract, a breach of fiduciary duty and a breach of an implied covenant, or some other novel theory of law.

The case was dismissed on summary judgment by a Massachusetts court, thus demonstrating the sound legal reasoning that characterizes just about every decision by a Massachusetts court that comes to mind. Since there was no specific language in Capital One's privacy notice, the company cannot be held liable for the consequences of failing to provide good advice, nor be saddled with duties outside of the contract.

But this column will not let Capital One, Visa or the credit bureaus off so easily; I find the companies involved guilty of excess literal-mindedness and sentence them to a remedial course in plumbing repair.

It's time for the industry to grow up.