False OFAC Alert on Credit Report: How to Solve Error?

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  • False OFAC Alert on Credit Report: How to Solve Error?
22 Apr, 2024
Daniel Cohen
4 min
342
ofac alert on credit report

If you had the misfortune of being erroneously flagged as a terrorist on your credit report, you need to read this.

Credit and background check companies, including Equifax, Experian, and TransUnion, search for, collect, and sell your data to businesses of all kinds. By law, they must use reasonable care to ensure accurate data. When they don’t - it means big trouble. How big? Being falsely flagged as a terrorist big. Here’s how to fix it.

A false OFAC alert on your credit report - in addition to causing distress, concern, and confusion - will diminish or eliminate your financial opportunities. This article provides insight into OFAC alerts, why an OFAC alert might appear on your credit report, how to fix the error, and, if necessary, take legal action to hold those responsible accountable.

As credit report error attorneys, we see the devastating consequences that credit report and background check errors can have on a person. In addition to losing the loan, the job, the apartment, the home, the car, the insurance, or whatever opportunity you were pursuing when someone ran a credit report on you, an error like this can cause emotional, reputational, mental, and even physical harm.

What Does OFAC Stand For?

OFAC stands for Office of Foreign Assets Control. OFAC is a division of the U.S. Treasury Department and enforces economic and trade sanctions based on U.S. foreign policy and national security rules and regulations. This means OFAC can restrict transactions with specific countries, entities, and individuals it suspects are terrorists, narcotics traffickers, and other bad actors who threaten the welfare of the U.S.

Understanding the SDN List

In the aftermath of the September 11, 2001 attacks, Congress passed the USA Patriot Act in 2001. It gives the authority to maintain a sanctions list which is called the Specially Designated Nationals and Blocked Persons List, or SDN list. That watch list includes individuals, terrorists, and companies with which no U.S. person can enter into business, or they will face severe civil and criminal penalties.

The rationale behind the SDN list is that terrorists should not use the U.S. to fund their extremist activities or maintain a livelihood. The problem starts when the information in the SDN list is erroneously cross-referenced with the data that the three major Consumer Reporting Agencies (CRAs) and background check companies maintain, and their processes and procedures mix innocent people with people whose names are on the SDN list, frequently causing them tremendous harm.

Why OFAC Alerts Appear on Your Credit Report?

Misidentification

Simple misidentification is one of the most common reasons for an erroneous OFAC alert. The SDN list contains names and aliases but lacks detailed personal information. Thus, individuals with familiar or common names or those with similar names to those on the SDN list might find themselves falsely flagged.

Outdated Information

Another cause for false OFAC alerts is outdated information. If an individual was previously under investigation or mistakenly added to the list and later cleared, their information might need to be updated promptly in all systems, leading to unwarranted alerts.

Data Mismatch

Data mismatches due to errors in data entry, reporting, or technical glitches can also lead to false OFAC alerts. Minor discrepancies in personal information can erroneously link an individual to someone on the SDN list and an OFAC match, meaning you lose the opportunity just because someone didn’t use the reasonable care the FCRA requires.

How Do You Remove an Incorrect OFAC Alert from Your Credit Report?

Review Your Credit Report

A federal law called the Fair Credit Reporting Act (FCRA) gives people the right to a free copy of their credit report. The three major CRAs (Equifax, Experian, and TransUnion) will provide you with a free credit report every week. Other credit reporting agencies and background check companies will give you one free credit or background check every year. Additionally, if any institution or company makes an adverse decision about you due to something in your report, it must tell you what that information is and provide you with it.

When you get the report, review it. Review it thoroughly and carefully and identify any errors besides the OFAC mistake. Consumer law attorneys know these reports and know the right action to take based on your circumstances. When you find an error, contact Consumer Attorneys.

File a Dispute

One of the steps you can take is to file a dispute. To do this, identify yourself, identify the problems with the report, and why the OFAC on credit report is wrong. You must provide evidence that you are not on the SDN list. Send this letter and a copy of the evidence to the CRA or background check company via certified U.S. mail. Sending the letter via U.S. mail gives you a record of the dispute and preserves your right to sue. The FCRA requires these agencies to investigate disputes within 30 days, remove any inaccurate information, and inform you of the investigation results.

Contact OFAC

You must also contact OFAC to clarify your situation. Explain you had an OFAC hit on your credit report. Give them your personal information and evidence proving that you're not the individual they seek. OFAC can issue a “letter of clearance” that you can then furnish to the credit reporting agencies.

Follow Up

Follow up on your disputes and communications with both the credit bureaus and OFAC. Keep a detailed record of all correspondence.

How do You Sue for a False OFAC Alert on Your Credit Report?

There are several reasons to sue, ways to sue, and people to sue for the false OFAC alert on credit reports and background check reports.

If the credit reporting agencies fail to remove the false OFAC alert from your report despite your disputes, you might have grounds for a lawsuit under the FCRA. The FCRA also gives you the right to have an accurate credit report and sue when a CRA or the CRAs fail to correct errors upon dispute. You can also sue if the CRA or background check company or the government itself failed to adequately protect your information or if the reason the OFAC alert is on your report in the first place is the result of negligence.

Gather Evidence

Compile all evidence of the false OFAC alert and your efforts to dispute it, including correspondence with the credit bureaus and OFAC and any documents you provided as evidence of your identity.

Legal Representation

Identifying defendants and gathering evidence are not easy tasks - not when you’re going against some very big and powerful companies. That’s why consulting with an experienced consumer protection attorney - especially an OFAC credit report lawyer - is a good idea. There may be avenues for compensation and entities to sue of which you are unaware. The goal of a lawsuit, especially a false hit OFAC lawsuit, is to get you the compensation you deserve and hold accountable everyone responsible.

Contact Us for Assistance

If you’ve found or faced a false OFAC alert on your credit report, let us know immediately. We have decades of experience with helping people get justice in the credit reporting, background check error, and discrimination arenas.

Call us at 1-877-615-1725. Email us at [email protected]. Visit our website and chat with a live representative. Or visit our website and fill out a contact form. Explain the OFAC on credit report error, and we will help you.

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Daniel Cohen
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Daniel Cohen is the Founder of Consumer Attorneys. Daniel manages the firm’s branding, marketing, client intake and business development efforts. Since 2017, he is a member of the National Association of Consumer Advocates and the National Consumer Law Center. Mr. Cohen is a nationally-recognized practitioner of consumer protection law. He has a wealth of proven legal experience in the US in: collective claims, representing visually impaired people who believe their rights under the Americans with Disabilities Act have been violated in both the physical and digital environments, corporate governance and dispute resolution. Read more

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