If a lender, car dealer or landlord told you your name came back as a possible match to a federal sanctions list, the report they pulled may have carried an OFAC alert. OFAC itself says many potential matches found through sanctions screening are false positives. The federal appeals court for Pennsylvania and New Jersey has held that OFAC alert information is part of a consumer’s file under the Fair Credit Reporting Act, and the FCRA gives you the right to see your file, dispute it and, in some cases, sue over it.
What an OFAC alert is and where it comes from
OFAC is the U.S. Treasury Department’s Office of Foreign Assets Control. It publishes the Specially Designated Nationals and Blocked Persons (SDN) list of individuals, companies and groups, such as terrorists and narcotics traffickers, designated under its sanctions programs. OFAC says their assets are blocked and U.S. persons are generally prohibited from dealing with them; federal regulations describe the same list (31 C.F.R. chapter V, appendix A).
OFAC says credit bureaus and agencies have adopted measures to comply with its regulations, using software that compares applicants against its sanctions lists, and that a potential match may trigger a “red flag” or alert. Equifax, for example, describes an OFAC Alert product that cross-checks the OFAC database when a credit report is requested.
Screening reports can carry the same search. The CFPB’s 2022 report on the tenant screening market says watchlist scans typically include the OFAC SDN list, and National Tenant Network lists a terrorist (OFAC) search among its add-ons.
Why a screening tool flags the wrong person
OFAC tells businesses that software may flag transactions not actually associated with OFAC targets, and that “human intervention becomes critical.” Its guidance on assessing name matches tells screeners to check whether the person has a different date of birth, identification number or nationality from the listing, or a distinct address, and says that if very few details match, there may not be a valid match.
A tool that reports a match on a name alone skips that comparison. In the Third Circuit case discussed below, TransUnion reported a match whenever names were similar, without comparing the OFAC information to what it already had on file; its file gave the consumer’s birth date as May 1944, and the SDN entry was for a person born in June 1971.
OFAC says it does not confirm potential matches or false positives, and that if you are not the person on the list, there is no need to contact OFAC. The correction runs through the consumer reporting agency that issued the report.
The alert is part of your file
The FCRA defines your “file” as all information on you recorded and retained by a consumer reporting agency, regardless of how it is stored (15 U.S.C. § 1681a(g)). In Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010), the federal appeals court for Pennsylvania, New Jersey, Delaware and the Virgin Islands (28 U.S.C. § 41) held that “information relating to the OFAC alert is part of the consumer’s ‘file’ as defined in the FCRA.”
In that case, a car dealership’s finance manager pulled the consumer’s TransUnion report, which read “INPUT NAME MATCHES NAME ON THE OFAC DATABASE.” The OFAC information appeared on reports sent to creditors but not in the reports TransUnion sent her when she asked for her file. The court affirmed the jury’s findings against TransUnion under the accuracy duty (§ 1681e(b)), the reinvestigation duties (§ 1681i) and the duty to disclose the file (§ 1681g).
How to get the OFAC information in your file
Every consumer reporting agency must, on request, disclose all information in your file and its sources (15 U.S.C. § 1681g(a)(1)–(2)), and identify each person that procured a report on you in the past year, or two years for employment purposes (§ 1681g(a)(3)(A)).
The three nationwide credit bureaus, Equifax, Experian and TransUnion, must provide your file free once in any 12-month period on request (§ 1681j(a)(1)(A)); the FTC says AnnualCreditReport.com is the only website authorized to fill those orders. If you received an adverse action notice, you can also get a free copy from the agency named in it if you ask within 60 days (§ 1681j(b)).
Because the OFAC information in Cortez was left out of the consumer’s own copy, ask in writing for all information in your file, including any OFAC or sanctions-screening information, and its sources. If the alert came from a tenant or employment screening company, send the request to that company; the background check companies directory helps identify who reported on you.
How to dispute a false OFAC match
OFAC says you have the right under the FCRA to request the removal of incorrect information, and that you should contact the credit reporting agency that issued the report. Dispute in writing: give your full name, including your middle name, your date of birth and your address, say that you are not the person on the sanctions list, and point to the details that differ. OFAC’s Sanctions List Search lets you look up the listing. Send copies, not originals, of supporting documents, and keep copies of everything; if the case comes to litigation, those copies are the record.
Under 15 U.S.C. § 1681i, the agency must conduct a reasonable reinvestigation free of charge within 30 days, which can run up to 15 more days if you send additional relevant information during that period. Anything found inaccurate, incomplete or unverifiable must be deleted or modified, and the agency must send you the results in writing. On request, it must notify anyone who received your report in the past six months, or two years for employment purposes, of the deletion (§ 1681i(d)).
If the alert stays, you can file a brief statement of dispute (§ 1681i(b)), and later reports that include the item must clearly note that you dispute it (§ 1681i(c)). The credit dispute letter guide walks through the letter itself.
OFAC says an alert does not necessarily mean someone is illegally using your Social Security number. If your report also shows accounts you never opened, see the identity theft page; if it shows accounts that belong to someone else, see the mixed credit file page.
The adverse action notice you are owed
If a lender, landlord or other user takes adverse action based in whole or in part on information in a consumer report, it owes you notice (15 U.S.C. § 1681m(a)). Adverse action includes an action or determination made in connection with an application you made or a transaction you started that is adverse to your interests (§ 1681a(k)(1)(B)(iv)).
The notice must name the reporting agency with its address and phone number, state that the agency did not make the decision and cannot give the reasons, and tell you that you can get a free copy within 60 days and dispute anything inaccurate or incomplete. Keep it.
For employment checks, see background check errors, and for a criminal record that belongs to someone else, see someone else’s record on your background check. If the alert is on a TransUnion report, the TransUnion credit report errors page covers that bureau.
When a false OFAC match becomes a legal claim
If a false OFAC match cost you credit, a rental or a purchase, and a proper dispute did not fix it, the FCRA may give you a claim:
- Accuracy (15 U.S.C. § 1681e(b)). The agency must follow reasonable procedures to assure maximum possible accuracy of the information about the person the report relates to.
- Reinvestigation (15 U.S.C. § 1681i). The agency must actually reinvestigate a dispute, not simply repeat what it already has.
- Disclosure (15 U.S.C. § 1681g). The agency must disclose all information in your file when you ask; in the Third Circuit, that includes OFAC information.
For a negligent violation, the FCRA provides actual damages plus attorney’s fees (§ 1681o). For a willful violation, it provides actual damages or statutory damages of $100 to $1,000, punitive damages as the court allows, and attorney’s fees (§ 1681n). Suit must be filed by the earlier of two years after you discover the violation or five years after it occurs (§ 1681p).
I handle these cases on contingency. The accuracy, disclosure and reinvestigation duties above apply to every consumer reporting agency, whether the alert came from a credit bureau or a screening company; the pages on JDP and NTN cover two screening companies.
Have your report reviewed
Send me the report that carried the OFAC alert, any adverse action notice you received, and whatever the agency sent back after your dispute, and I will tell you whether I see a claim. The FCRA attorney page covers how these cases work. Contact the firm to have your report reviewed.
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This page is about consumer report accuracy. The Kim Law Firm is not affiliated with the U.S. Department of the Treasury or its Office of Foreign Assets Control, Equifax, Experian, TransUnion, National Tenant Network, JDP, or any lender, landlord or screening company, and this page is not a complaint about any of them. It describes how OFAC alerts can appear on credit and screening reports and the rights consumers have when an alert names the wrong person.