Opinion ID: 4510978
Heading Depth: 3
Heading Rank: 2

Heading: TransUnion’s “OFAC Advisor” Product

Text: The class’s claims trace back to TransUnion’s launch of a new product in 2002 and its erroneous belief that the new product was exempt from the FCRA. TransUnion saw a 12 RAMIREZ V. TRANSUNION business opportunity because its clients—who purchase consumer credit reports from TransUnion because they are deciding whether to offer credit to consumers—are legally obligated to ensure they are not offering credit to a prohibited SDN appearing on the OFAC list. TransUnion therefore developed a product it called “OFAC Advisor,” which added an alert to a consumer’s credit report indicating whether the consumer was a prohibited SDN on the OFAC list. TransUnion obtained the information about whether consumers were OFAC matches from a third-party company, Accuity, Inc. Accuity’s software conducted a “name-only” search, running a consumer’s first and last name against the names on the OFAC list. A search would result in a match if the consumer’s first and last name were either identical or similar to a name on the OFAC list (e.g., “Cortez” would match with “Cortes”). 2 When TransUnion first began offering the OFAC Advisor product, it determined that the OFAC alerts being placed on consumer credit reports were exempt from the FCRA, including the FCRA’s requirement that TransUnion “follow reasonable procedures to assure maximum possible accuracy of the information” it placed on consumer credit reports. 15 U.S.C. § 1681e(b). Specifically, TransUnion determined the OFAC alerts were not governed by the FCRA because the OFAC list was not stored in TransUnion’s database; the data was stored in a separate file 2 In collecting other types of data for use on consumer reports—such as tax liens or bankruptcy judgments—TransUnion used at least one additional identifier other than the consumer’s name (e.g., address, date of birth, or social security number). OFAC information was the only consumer-report data that TransUnion collected using name alone. RAMIREZ V. TRANSUNION 13 and software supplied by TransUnion’s third-party vendor, Accuity. Therefore, TransUnion did not follow its normal procedures to ensure accuracy. TransUnion also adopted a policy of not disclosing OFAC matches to affected consumers when the consumers requested a copy of their credit reports. Although TransUnion received a number of consumer complaints after it launched OFAC Advisor and adopted these policies, TransUnion remained mostly unscathed for these practices until 2005 when a consumer sued.