‘Flagged’: MicroBilt Intentionally Allows ‘Innocent’ Consumers to Be Linked to Gov’t Foreign Assets Control List, Lawsuit Says

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A proposed class action alleges MicroBilt Corporation has engaged in “widespread” violations of federal law by improperly associating innocent consumers with “terrorists, narcotics traffickers, money launderers, arms dealers, and other criminals” subject to United States government sanctions. 

The plaintiff, a Grand Prairie, Texas resident, alleges in the nine-page complaint that MicroBilt, a consumer reporting agency, has violated the federal Fair Credit Reporting Act (FCRA) by failing to ensure the maximum possible accuracy of the U.S. Treasury Department-issued Office of Foreign Assets Control (OFAC) records it sells to prospective creditors. According to the lawsuit, MicroBilt fails to use all available information about consumers to determine whether to associate them with criminals on the OFAC list, including by using dates of birth to rule out clear mismatches, as a way to “maximize profits and advertise that its products ‘work.’” 

“Defendant thus intentionally employs procedures that maximize the likelihood of a match between data on the OFAC List and consumers, thereby compromising accuracy,” the lawsuit alleges. “Defendant’s treatment of OFAC information is not accidental, but instead a result of deliberately designed policies and procedures.” 

According to the lawsuit, the U.S. Treasury Department’s Office of Foreign Assets Control administers and enforces economic sanctions against terrorists, international narcotics traffickers, and individuals involved in selling weapons, among others. Individuals subject to OFAC sanctions are identified in a list published by the department as “Specially Designated Nationals” and “Blocked Persons” and legally ineligible from obtaining credit in the United States, the suit says. Inclusion on the OFAC list may also prevent a person from gaining employment or subject them to deportation or criminal prosecution, per the lawsuit.

“The full OFAC List as maintained by the Treasury Department is publicly available information, and whether a person is on the OFAC List is a matter of public record,” the complaint specifies. 

As part of its business, MicroBilt assembles or evaluates consumer credit information or other details for the purpose of furnishing consumer reports to third parties, the suit says. MicroBilt, according to the case, regularly puts together information that has a bearing on a consumer’s creditworthiness, including credit tradelines and public records, and includes this information on reports. 

Although it is “well aware” of the implications of failing to comply with federal regulations as they pertain to doing business with those on the OFAC list, MicroBilt fails to follow reasonable procedures to assure the maximum possible accuracy of the OFAC information it sells, the lawsuit alleges. The complaint claims MicroBilt “regularly” sells to prospective creditors reports that inaccurately label “innocent” consumers as OFAC-list criminals. 

MicroBilt allows this to happen in order to maximize profits and show that its products “work,” according to the lawsuit. 

With regard to the plaintiff, the lawsuit says the woman applied for a loan in November 2020 with Oasis1 Marketing. The company, after receiving the plaintiff’s consumer report, realized the woman had been flagged by MicroBilt as on the OFAC Watchlist, the case relays. 

According to the lawsuit, the issue stems from the fact that there were two individuals as of November 2020 with the same name as the plaintiff, yet with different birthdays, on the publicly available OFAC list. 

“Plaintiff is not on the OFAC List or any other government watch list,” the lawsuit reads. “Despite having been provided with Plaintiff’s full name, address, social security number and date of birth, MicroBilt used a loose name matching procedure to determine whether to include OFAC information on the consumer report, and disregarded available date of birth information that disqualified any match.”

The plaintiff was subsequently denied the loan due to her being flagged as on the government’s OFAC Watch List. 

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