TransUnion Errors – No Harm Done?

judge in a court sessionCredit reports play a huge role in our lives and impact whether we can purchase big items, like a house or car – and at what interest rate. It is no secret that poor credit can make your financial life more difficult, and it often takes years to recover.

However, what if the problem on your credit report was actually caused by an error made by the credit bureau and you do not find out about it until years later?  The damages can be extensive and far-reaching, as one individual discovered.

TransUnion’s Terrorist Watch List

Can you imagine a more astonishing outcome when applying for credit than to be notified you are on a U.S. terrorist watch list? This is what Sergio Ramirez discovered at a local car dealership when he applied for an auto loan.

Not only was Mr. Ramirez denied credit for the loan, but after learning the reason why, he also had no choice but to cancel his family’s planned international vacation.

What is the TransUnion’s Terrorist Watch List?

TransUnion's terrorist watchlist is actually an in-house product it created from data that is maintained by the U.S. government. The official U.S. government terrorist watchlist, called the “Office of Foreign Assets Control” list (OFAC), is maintained by the Treasury Department. 

TransUnion uses this in-house product, selling the data to other third-party businesses in the country. One of the businesses where this data was sold included the local car dealership where Mr. Ramirez tried to buy a car.

A Case of Mistaken Identity

If Sergio Ramirez was on the terrorist watch list, is he not a valid threat to U.S. safety?

If the data was correct, maybe. However, the problem with this list – and with Mr. Ramirez being placed on it – is that in this instance, it was a case of mistaken identity. Sergio Ramirez shares the same name as another individual who was on the OFAC.

TransUnion did not attempt to verify or differentiate individuals on this list who share the same name with other American citizens. Simply put, the wrong Mr. Ramirez ended up on the list as a terrorist.

Thousands More TransUnion Mistakes

According to Daily Kos, as Mr. Ramirez took the necessary steps to remove the error from his credit report and clear his name, he discovered that this was not the first time TransUnion had made this error. In fact, Ramirez learned that more than 8,100 others across the U.S. were also mistakenly added to this list. Most of these victims were non-white consumers with commonly used Latino or Middle Eastern names.

About 1,800 of these 8,100 consumers had this erroneous terrorist designation shared with a third party – such as an employer or loan company. As for the remaining consumers – most were unaware they were a victim of this serious mistake.

TransUnion’s Response to Their Error

According to TransUnion – unless you are able to prove that it sold this false information to other third parties, it is simply a case of “no harm done.” The credit bureau further said that since they do not maintain accurate records of all of the third-party businesses to whom they sell this data, you cannot ask them for it.

Currently, Mr. Ramirez is pursuing a class action lawsuit under the Fair Credit Reporting Act on behalf of the more than 8,100 others who were also mistakenly identified as a terrorist threat and placed on the OFAC.

Now, even after two separate courts found the credit bureau to be at-fault and awarded more than $60 million in damages, TransUnion is appealing to the Supreme Court.

If the Supreme Court agrees with the earlier decisions, the results will send a serious message to corporate America.

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