Opinion ID: 4510978
Heading Depth: 3
Heading Rank: 4

Heading: TransUnion’s OFAC Practices After the Cortez

Text: Litigation After being slammed with an $800,000 jury verdict (subsequently remitted to $150,000) in Cortez, TransUnion made surprisingly few changes to its practices regarding OFAC alerts. In November 2010, TransUnion changed the language of the OFAC alert used on credit reports. Instead of stating that a consumer was a “match” to the OFAC list, the reports would state that a consumer was a “potential match.” TransUnion also made some adjustments to its matching algorithm, including requiring an exact match between first and last names, reducing the false-positive rate 16 RAMIREZ V. TRANSUNION from about 5 percent to about 0.5 percent. 4 TransUnion requested additional software enhancements from Accuity, but these were not implemented until 2013. Within the timeframe of the Cortez litigation, TransUnion received warnings about its OFAC practices from officials at the Department of the Treasury’s OFAC. In an October 2010 letter to TransUnion, OFAC officials noted that they continued to hear from TransUnion customers and individual consumers who had been adversely affected by false OFAC alerts on TransUnion credit reports. OFAC officials expressed concern that a product “that does not include rudimentary checks to avoid false positive reporting can create more confusion than clarity and cause harm to innocent consumers.” OFAC officials were particularly worried by OFAC alerts being “disseminated broadly in conjunction with credit reports.” As a result of these warnings from OFAC officials and the Cortez litigation, TransUnion also changed how it communicated with consumers about the OFAC alerts on their credit reports. Beginning in January 2011, when consumers flagged as OFAC matches requested copies of their credit reports, TransUnion would send them two mailings: (1) the consumer’s credit report with the OFAC alert redacted, and (2) a separately mailed OFAC Letter. The OFAC Letters were sent within one day of the credit reports. These letters were substantially similar to the one described above that Ramirez received. TransUnion did not include a summary-of-rights form in the mailings containing 4 TransUnion presented no data showing that any of its name matches through OFAC Advisor were correct. In other words, TransUnion could not confirm that a single OFAC alert sold to its customers was accurate. RAMIREZ V. TRANSUNION 17 the OFAC Letters. In July 2011, TransUnion finally stopped sending OFAC Letters and began including OFAC alerts directly on the credit reports it sent to consumers.