OFAC Alert on Your Credit Report? Here's What to Do

By now, you’ve undoubtedly heard about the importance of keeping a close eye on your credit report to ensure that your payments are being reported on time, accounts are paid as agreed, and so on. But it can also help you stay aware of potential credit errors that have nothing to do with your activity, which is often the case when the heart-stopping OFAC alert shows up.

If you don’t know what an OFAC alert is, you’re not alone. We’re going to dig into what an OFAC alert is, where it comes from, and why you might see one on your credit report. We won’t leave you hanging there, though, we’ll also cover what you need to do to clear an OFAC alert from your credit report so you can get on with your life.

Understanding OFAC and OFAC Alerts

Before we dig into what to do about an OFAC alert on your credit report, it’ll be helpful to know what exactly OFAC is, and what their alerts mean in general, as well as for your consumer credit report.

What is OFAC?

The Office of Foreign Assets Control, or OFAC, is one of the U.S. Department of the Treasury’s branches. Its main focus is enforcing economic and trade sanctions against individuals, countries, and entities that are involved in certain activities, including human rights abuses, terrorism, and drug trafficking.

What is an OFAC Alert?

An OFAC alert is placed on your credit report to notify those who inquire that your personal information (name, address, or other personal information) has been found on OFAC’s SDN list. The Specially Designated Nationals (SDN) list contains names of anyone that is targeted by OFAC sanctions.

Reasons for an OFAC Alert on Your Credit Report

An OFAC alert could appear on your credit report for a few different reasons, including:

• A typographical error or mistake in your personal information.
• A case of mistaken identity, where your information is very close to an individual that is on the list.
• Fraud or identity theft, where your information was used during illegal activities.

Potential Consequences of an OFAC Alert

When you have an OFAC alert on your credit report, there are many consequences you could face. These include:

• Difficulty obtaining loans or lines of credit.
• Frozen financial assets, including bank accounts.
• Legal penalties or fines if the alert was accurate and you really were involved in illegal activities.
• Rejected applications for employment or housing.

Steps to Take if You Receive an OFAC Alert

Verify the Alert

The first step is to confirm the presence of the alert by carefully reviewing your credit report. If it is indeed there, take note of the date it was added and any other specific information that matches the SDN list.

Contact the Credit Bureaus

Next, contact all three of the major credit bureaus - Equifax, Experian, and TransUnion - and file a dispute with them. You’ll need to be able to provide them with any proof you have that shows that the alert is inaccurate, and in some cases, you may be required to produce additional documentation to support your dispute, like official identity documents or account statements. 

Contact OFAC

To request removal from the SDN list, you contact OFAC directly to inform them of the error. They will have a similar process as the credit bureaus for opening a dispute, and in most cases, the same documentation you submitted to the credit bureaus will work for the proof needed to process your dispute.

Resolve the Issue

To resolve the problem as quickly as possible, it’s crucial to cooperate with them, which will likely involve providing proof of identity and additional documentation. It may take some time to clear your name from the list, sometimes several months, but it will be worth the time in the end.

Follow Up

Once you’ve filed the dispute, you may see the information come off your report, you may see it change, or you may see nothing happen for some time. It’s important to be patient, but it’s even more important to be persistent. It can take several months for corrections to show up on your credit reports, so keep your eyes peeled. 

If you don’t see any changes over the span of about 3-6 months, you may need to contact the credit bureau again to follow up.

Preventing Future OFAC Alerts

Regularly Review Your Credit Report

OFAC alerts can be a huge surprise if you weren’t expecting it, so make it a habit to regularly review your credit report from each of the three credit bureaus every year. You can get one free report every 12 months from each agency, and there are apps like CreditKarma that can give you instant visibility.

Be Cautious of Identity Theft

Being cautious with all sensitive and personally identifiable information can help protect yourself and your credit from the damaging effects of identity theft. Never share your social security number or sensitive bank account details with anyone, and be wary of social media memes that try to trick you into posting sensitive information.

Understand OFAC Regulations

The vast majority of people who may find an OFAC alert on their credit report already know what it is, so if you don’t, chances are good that if you see one it’s a mistake. Nevertheless, you should make sure you’re familiar with OFAC regulations because by knowing the rules you can avoid any potential unintended violations that could lead to an alert. 

Conclusion

Having an OFAC alert on your credit report can be an intensely stressful and confusing situation, particularly if it’s placed on your credit report by mistake. However, by following the steps that we’ve outlined for you here, you can quickly and effectively address the issue, and see it through to its resolution. 

Remember to be proactive and stay vigilant; by regularly inspecting your credit report, you can help protect yourself from identity theft, and by understanding OFAC regulations you can avoid potential sanctions or OFAC alerts. Remember that if you go through the motions and the credit bureaus don’t update their records promptly, you could have grounds for legal action – contact Fair Credit today.