Equifax Falsely Flags Consumers as Criminals on Gov. Watch List, Class Action Claims

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Equifax faces a proposed class action that claims the credit reporting agency has falsely matched consumers with individuals on a government watch list despite possessing the information it needs to rule out mismatches.

The nine-page case alleges Equifax has failed to employ reasonable procedures to “assure maximum possible accuracy” of the information it includes in consumer reports. As a result, the defendant frequently reports that innocent consumers have been matched with individuals on a list of specially designated nationals and blocked persons that’s maintained by the U.S. Treasury Department’s Office of Foreign Assets Control. Per the suit, the OFAC list contains terrorists and criminals subject to government sanctions and who are thus ineligible for credit, may not be employed and could be subject to deportation and criminal prosecution.

The lawsuit claims Equifax’s improper association of consumers with terrorists, narcotics traffickers, money launderers, arms dealers and other criminals on the OFAC list is not accidental but the result of “deliberately designed policies and procedures” meant to boost the company’s profits.

“Equifax fails to use all of the available information about consumers to determine whether to associate them with a criminal on the OFAC list, and does not use the available information to rule out clear mismatches,” the complaint alleges. “Equifax does this because it wants to provide some OFAC-related information to its customers (accurate or not), in order to maximize its profits and advertise that its products ‘work.’ Equifax thus intentionally employs procedures that maximize the likelihood of a match between a data on the OFAC list and consumers, compromising accuracy.”

According to the case, although Equifax possesses more information about consumers than just their first and last names, the defendant intentionally uses only names when determining whether an individual matches someone on the OFAC list. As a result, the defendant’s OFAC Alert product often generates mismatches that could easily be proven false had Equifax cross-referenced consumers’ addresses, dates of birth, Social Security numbers or other identifying information, the lawsuit attests.

The case looks to cover anyone in the U.S. and its territories about whom Equifax sold a consumer report to a third party that included an OFAC record within the past five years and until resolution of the lawsuit.

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