On February 27, 2011, Sergio Ramirez went into his local Nissan dealership in Dublin, California to purchase a Nissan Maxima. Little did he know that the routine event would lead to a major change in his life and the life of every consumer within the country.
After Mr. Ramirez selected which color they wanted and after they negotiated a set price, the dealership ran a credit check on Mr. Ramirez. When his report came back from Trans Union, it stated, “***OFAC ADVISOR ALERT – INPUT NAME MATCHES NAME ON THE OFAC DATABASE.” What this means is TransUnion was claiming that Mr. Ramirez was an internationally wanted drug dealer.
Beginning in 2002, TransUnion introduced an add-on product called OFAC Name Screen Alert. OFAC is the U. S. Treasury Department’s Office of Foreign Assets Control. OFAC maintains a list of “specially designated nationals” who threaten America’s national security. Individuals on the OFAC list are terrorists, drug traffickers, or other serious criminals. It is unlawful for U.S. businesses to enter into business transactions with anyone on this list.
Name Screen worked in the following way: When a business opted into the Name Screen service, TransUnion would conduct its ordinary credit check of the consumer, and it would also use third-party software to compare the consumer’s name against the OFAC list. If the consumer’s first and last name matched the first and last name of an individual on OFAC’s list, then TransUnion would place an alert on the credit report indicating that the consumer’s name was a “potential match” to a name on the OFAC list. TransUnion did not compare any data other than first and last names. Unsurprisingly, TransUnion’s Name Screen product generated many false positives. Consequently, TransUnion was labeling thousands of law-abiding Americans as terrorists, drug traffickers, or serious criminals. However, TransUnion knew this problem existed.
In 2005, TransUnion was sued by a different consumer because the report flagged the plaintiff—Sandra Jean Cortez, born in May 1944—as a match for a person on the OFAC list: Sandra Cortes Quintero, born in June 1971. TransUnion withheld this OFAC alert from the credit report that Cortez had requested. And despite Cortez’s efforts to have the alert removed, TransUnion kept the alert in place for years. This previous plaintiff was awarded $50,000 in actual damages and $750,000 in punitive damages, and the jury requested that TransUnion revamp its systems.
However, TransUnion made a few changes. Instead of increasing the factors it required for a match (such as adding birthdate, middle names, and citizenship), TransUnion decided that it would just change the language of the report from “match” to “potential match”.
Mr. Ramirez sued TransUnion on a class action basis and a jury awarded each class member $984.22 in statutory damages (about $8 million total) and $6,353.08 in punitive damages (about $52 million total). However, this case has been reversed by the Supreme Court of the United States and will have to go back to the lower court to have the results determined. Regardless of the partial reversal, TransUnion will be paying for this mistake.
If you are a victim of a background check identity mixup, you need dedicated lawyers on your side to stick up for your interests. Barthel Legal is a law firm that is dedicated to representing consumers. We represent clients at no out-of-pocket cost to the consumer. If you would like to get advice on what next steps you should take, request a free consultation.
