False OFAC Alerts

What is OFAC?

“OFAC” refers to the Office of Foreign Assets Control, a division of the U.S. Treasury Department. OFAC enforces economic and trade sanctions put in place by the U.S. government. To do this, OFAC has created a list called the Specially Designated Nationals and Blocked Persons List that is commonly referred to as the OFAC list. This list includes mostly foreign terrorists, narcotics traffickers, and other “bad guys” that U.S. companies cannot do business with. 

Why OFAC Alerts Appear on Credit Reports

Because companies face severe penalties for doing business with someone on the OFAC list, they often hire third parties to do an OFAC search before they complete a transaction with a consumer, such as selling a car, extending a loan or home mortgage, or renting housing. Many times, these businesses ask the company providing a credit report to complete the OFAC search and include the information as part of the credit report. 

Problems arise when the companies performing the OFAC search use loose matching procedures to match consumers to the OFAC list. For example, the consumer reporting agency might rely only on similar names to flag someone as potentially being on the list, leading to innocent people being wrongly flagged as terrorists or drug traffickers.

The Impact of a False OFAC Alert

A false OFAC alert can:

• Cause your rental application to be rejected or your move-in date delayed, 
• Prevent you from buying a car or obtaining financing, or having your purchase delayed, 
• Make you to feel humiliated or embarrassed that a landlord, sales person, or bank employee was told that you could be a drug trafficker or terrorist, or
• Trigger stress and worry that the false flag could show up again the next time you apply for housing or attempt to obtain credit. 

The consumer protection report attorneys at Berger Montague know how devastating these errors can be. Losing a loan, job, apartment, or other opportunities can cause emotional, reputational, mental, and even physical harm and you could be entitled to compensation.

What Causes False OFAC Alerts

Bad Matching Procedures: The most frequent cause of false OFAC alerts are bad matching procedures. While credit reporting agencies and background report companies are required by law to use maximum possible accuracy, unfortunately their practices often fall short of this standard. Despite having access to a consumer’s entire credit profile, a credit reporting agency may only use one data field, such as name, when conducting the OFAC search. 

This means individuals with common or similar names to those on the OFAC list might be wrongly flagged. For example, if your name is John Smith and there is a John Smith on the OFAC list, you could be wrongly identified as a threat even though you have a different date of birth, a different Social Security Number, and a different address history. The lack of care by companies conducting OFAC searches can lead to serious consequences for the innocent people being negligently flagged. 

Data Entry Errors: Errors in data entry can also lead to false OFAC alerts. Minor discrepancies in personal information, such as a misspelled name, incorrect birthdate, or address mix-up, can erroneously link an individual to someone on the OFAC list. For example, a simple typo in a name or social security number can create a false match, leading to severe consequences for the wrongly identified individual.

Removing an Incorrect OFAC Alert

1. Consider Contacting an Attorney: If you know that you were the subject of a false OFAC alert, consider contacting a lawyer with expertise in OFAC reporting immediately. They can help determine if you may be entitled to compensation and help prevent future inaccurate flags from appearing on your credit report.
2. Review Your Credit Report: Get a copy of your credit report from the business or landlord that obtained the report. If it does not include the OFAC search results, request to see those results as well. 
3. File a Dispute: Dispute the OFAC alert with the credit reporting agency that conducted the OFAC search, preferably via certified mail. Do not contact OFAC. They are not able to help you because the credit reporting agency caused the problem. 
4. Contact a Lawyer: If the credit reporting agency does not agree to remove the false OFAC alert or does not respond to your correspondence, you should contact a lawyer to see if your rights under the law have been violated and whether you may be able to seek compensation.

How Much Does it Cost to Hire a Lawyer?

Berger Montague provides free consultations, and you won’t pay out-of-pocket fees if we represent you. We don’t get paid unless we secure compensation for you. Schedule a Free Consultation with Berger Montague now.

Contact Us Today to Get Started

If you’ve been wrongly flagged with an OFAC alert on your credit report, don’t wait. Contact Berger Montague today for expert legal assistance. Let us help you clear your name and protect your financial future. You can use the form on this page to reach out to schedule a free consultation.

OFAC List FAQs

What is OFAC?
OFAC stands for the Office of Foreign Assets Control, a division of the U.S. Treasury. It has the power to impose monetary penalties on U.S. companies that engage in business with individuals or entities on the OFAC list.

What is the OFAC list?
The OFAC list (also called the Specially Designated Nationals and Blocked Persons List) includes mostly foreign individuals and entities with whom U.S. persons cannot do business. The list includes international drug traffickers, terrorists, and other “bad guys.”

Why is there an OFAC alert on my credit report or background report?
The most likely cause is that you have a similar name as a person on the OFAC list and the company conducting the OFAC search has used loose matching procedures to identify matches. You can search the OFAC list at this website: https://sanctionssearch.ofac.treas.gov. It could also be because of a simple data entry error.

How can I get my report?
You can request a copy of your report from the business that obtained it. They may direct you to a third party to get the report. If the report does not include OFAC alert, request that the results of the OFAC search be shared with you as well.

How do I dispute a false OFAC alert?
You should consider contacting an attorney knowledgeable regarding the Fair Credit Reporting Act and OFAC before submitting a dispute to ensure that your rights are being protected throughout the dispute process. If you wish to submit a dispute on your own, you should contact the company that conducted the OFAC search via certified mail and ask them to remove the inaccurate information.

Should I contact OFAC?
No. The Office of Foreign Assets Control, a division of the U.S. Treasury, cannot do anything to fix the false alert because they did not create the report. If you want to see if there is someone with a similar name on the OFAC list, you can search it here: https://sanctionssearch.ofac.treas.gov.

What happens if my dispute is ignored or they refuse to remove the OFAC alert?
You may have grounds for a lawsuit under the Fair Credit Reporting Act. You should contact an attorney.

Can I sue for a false OFAC alert?
You may be able to if the credit reporting agency failed to use maximum possible accuracy when conducting the OFAC search or fails to correct the error. An attorney will evaluate all the information to determine if you can sue and who you can sue. Under the Fair Credit Reporting Act (FCRA), you may be entitled to compensatory and punitive damages for financial and emotional harm caused by false OFAC matches, and to have your attorneys’ fees paid for.

What evidence do I need to gather before contacting an attorney?
Compile any correspondence referring to the OFAC alert, the report if you can get it, and documents relating to the impact the OFAC alert has had on you (e.g., being unable to purchase a car or obtain financing). An attorney can help you identify any additional important information.

Should I hire an OFAC list lawyer?
Consulting with an experienced consumer protection attorney is recommended if you have been wrongly flagged with an OFAC alert. They can help navigate the complexities of the case and identify potential avenues for compensation.