OFAC Terrorist Watch List Alert on Your Credit Report

In recent years, more and more consumers have been denied loans or credit because their credit report came back with a false alert regarding a specialized list held by the Office of Foreign Assets Control (OFAC) within the United States government. Francis Mailman Soumilas P.C. is the leading law firm in this area of consumer protection law — with the most cases, highest verdicts (in both individual and class actions) and top settlements. If you have a false OFAC alert on your credit report, you have found the preeminent firm to help you.

But what exactly does this OFAC alert mean, and how is it placed on your credit report in the first place?

Read Video Transcript

What is OFAC?

The Office of Foreign Assets Control (OFAC) is a branch within the U.S. Department of the Treasury that administers and enforces economic sanctions primarily against countries and groups of individuals, such as terrorists and narcotics traffickers.

What is an OFAC alert?

An OFAC alert is a notification that appears on a consumer’s credit report and tells the lender that the consumer’s name matches a name on the U.S. Department of the Treasury’s Specially Designated Nationals (SDN) list. The SDN list includes names of suspected terrorists, drug traffickers, money launderers and arms dealers who are prohibited from doing business in the United States.

How and Why an OFAC Alert Appears on Your Credit Report

Under the USA Patriot Act, lenders are required to check the potential customer’s information against the SDN list every time there is a new application for credit. This rule is meant to prohibit terrorists and others on the SDN list the ability to finance a life in the United States. Soon after this rule was established, credit reporting agencies, like Experian, TransUnion and Equifax, started offering OFAC alert services.

When a consumer applies for a loan or credit, the lender will request a copy of the consumer’s credit report from a credit reporting agency (CRA) or credit bureau.

The CRA will pull the consumer’s information for the credit report along with a search against the SDN list.  Searches against the SDN list may use different and potentially less stringent matching procedures.

If there is a match, the credit report will contain a notation related to the SDN list. If the CRA uses only first and last names, there may be a disclaimer stating that the match is only a “possible” or “potential” match.

Lenders are not supposed to make a credit decision based solely on the fact that the report included an OFAC alert. It is the lender’s responsibility to check the official list provided by the Treasury Department if a consumer’s report comes back from the credit bureau with an OFAC alert.

In practice, however, many lenders and other businesses will deny the application and move on to the next transaction rather than risk the penalties associated with doing business with a person on the SDN list.

Your Rights for Removing an Incorrect OFAC Alert from Your Credit Report

As a consumer, you have rights that protect you from incorrect information on your credit report, including an OFAC alert. If there is a false alert on your credit report, here’s what you can do next:

• If you are worried that a credit bureau may report an OFAC alert on your credit report, contact the credit bureau and ask for a copy of your disclosure. Under the Fair Credit Reporting Act (FCRA), you have a right to receive this information.
• If an OFAC alert connected to your name is being reported to lenders, contact the creditor immediately and tell them you’re not on the list and the alert is incorrect.
• Send in a dispute letter and request for the alert to be removed from your credit history immediately.
• If the credit bureau refuses to give you your disclosure or remove the false alert, contact a consumer protection attorney.

Sue for Unresolved Errors on Your Credit Report

In June 2017, Francis Mailman Soumilas, P.C. represented a California man in a historic class action lawsuit against TransUnion because of an incorrect OFAC alert placed on his credit report. It resulted in a $60 million jury verdict — the largest FCRA verdict in history – which was reduced to just over $40 million on appeal.

Francis Mailman Soumilas P.C. also has the highest individual case verdict in the area of false OFAC alerts, and more publicly known multi-million dollar settlements stemming from false OFAC alerts and misleading OFAC disclosers than any law firm in the U.S.

You have the right to dispute and remove errors on your credit report. If your credit report contains an incorrect OFAC alert and you’ve disputed the error or can’t receive a copy of your file, you may be entitled to damages.

Fill out the free case review form on this page or call 1-877-735-8600 now to speak to our legal team.