Products Liability for Credit Cards?
Someone once observed that "the argument for reregulation of consumer lending is a lot like the argument for regulating any other useful but potentially dangerous product." That someone was fellow Credit Slips blogger Elizabeth Warren in her book (with Amelia Warren Tyagi), The Two-Income Trap: Why Middle Class Mothers & Fathers Are Going Broke (Basic Books 2003). Warren & Tyagi continue, "Predatory loans may not set houses on fire the way a faulty toaster might, but they steal people's homes all the same." Just like we regulate toasters for consumer safety, an argument can be made that we should do the same for consumer lending.
In a similar vein, a student note in the most recent issue of the University of Illinois Law Review explores the doctrinal underpinnings for potential products liability claims against credit card issuers. The cite is Adam Goldstein, Note, Why "It Pays" to "Leave Home Without It": Examining the Legal Culpability of Credit Card Issuers Under Tort Principles of Products Liability, 2006 U. Ill. L. Rev. 827. Is products liabilty a viable theory against the credit card industry? Even if there seems to be only a remote chance that a court would actually order a credit card company to pay damages, will we see credit card companies begin to take ameliorative steps like fast-food and alcoholic beverage companies did in response to similarly remote threats of liability?