An OFAC alert on a credit report tells whoever pulled it that your name resembles a name on the federal government’s sanctions list — the roster of terrorists, drug traffickers, and sanctioned persons kept by the Treasury Department’s Office of Foreign Assets Control. For the person standing at a car dealership or waiting on a mortgage when it surfaces, it is one of the most frightening errors consumer reporting produces. It is also one of the most litigated, and in this federal circuit, the law is firmly on your side.
What the OFAC list is, and how it ends up on a credit report
OFAC maintains the Specially Designated Nationals list — people and entities whose assets are blocked and with whom U.S. businesses generally cannot deal. Credit bureaus sell screening add-ons that compare your name against that list and stamp an alert on the report when something resembles a match. The failure mode is built in: the matching has historically leaned on names alone. In the two leading federal cases, the consumers’ birth dates and middle names did not match the list entries at all — the names were merely similar — and the alerts went out anyway.
What a false OFAC match costs
In the leading Third Circuit case, Cortez v. Trans Union, a Chicago-born woman with excellent credit was flagged at a car dealership as a possible match to a woman on the sanctions list born twenty-seven years later; the dealership held her for hours and threatened to call the FBI. In the Ninth Circuit’s Ramirez case, a man was denied car financing on the spot when the dealer saw a “potential terrorist” alert built on a first-and-last-name match. A false OFAC alert does not quietly lower a score — it stops transactions cold and brands you with the worst label a report can carry.
Your rights: the alert is part of your consumer report
Trans Union argued for years that OFAC alerts were not part of the credit report at all, and therefore outside the Fair Credit Reporting Act. The Third Circuit — the federal appeals court covering Pennsylvania and New Jersey — rejected that in Cortez: OFAC data transmitted with a consumer report is part of the report. That means the accuracy duty applies (reasonable procedures to assure maximum possible accuracy — comparing the birth date already in your file is the obvious one), the disclosure duty applies (when you ask for your file, they must show you the alert they are showing lenders), and the reinvestigation duty applies (a dispute must actually be investigated — a policy of never investigating OFAC disputes is what produced the willfulness finding in Cortez).
What to do if an OFAC alert appears on your report
Get your file from each bureau and ask specifically whether any OFAC or sanctions-list data is being transmitted with your report — the alert does not always appear on the copy sent to you, which is itself part of the problem the courts have condemned. Dispute it in writing with your identifying details — full name, middle name, date of birth — and keep every response. Our credit dispute letter guide covers the mechanics. The same name-matching failure behind OFAC alerts also drives mixed credit files, and the two errors sometimes travel together. If the alert traces to identity confusion after a theft, our identity theft guide adds the additional steps.
When it becomes a legal claim
In Cortez, the jury’s verdict was affirmed on appeal — $50,000 in compensatory damages and $100,000 in punitive damages — because the bureau matched on name alone, hid the alert from the consumer, and refused to investigate her dispute. In Ramirez, a jury found willful violations over the same first-and-last-name matching. If a sanctions-list alert that is not you has cost you a car, a mortgage, or hours of humiliation, the FCRA provides actual damages, statutory and punitive damages for willful violations, and attorney’s fees — which is why we handle these cases on contingency. Admitted in Pennsylvania and New Jersey — the states the Cortez court’s rule directly governs — and available to appear pro hac vice in other federal courts.
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Richard Kim is rated 10.0 out of 10 on Avvo, with 35 client reviews averaging 5.0 out of 5 stars (as of August 2026) — read the reviews on Avvo. Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts. You pay nothing unless we win.
Published by The Kim Law Firm, LLC — about attorney Richard Kim. Last updated August 2026.