Problems With "No Buy" Terror Watch List

Similar To "No Fly List" And, Like "No Fly," "No Buy" Impeding Non-Terrorists

(CBS)  Imagine not being able to buy a home, car, or other "big-ticket" item because your name shows up on a terror watch list. That's happening to some people who haven't committed a crime and aren't terrorists, Early Show consumer correspondent Susan Koeppen reported Monday.

The "No Buy" list terror watch list, Koeppen explains, is similar to the "No Fly" list you've probably heard of. The latter is designed to prevent terrorists from boarding planes.

And, says Koeppen, the "No Buy" list is hindering some innocent people, in the same way the "No Fly" list does.

Sandy Cortez knows that all too well.

When the grandmother from the Denver area went to buy a car, she thought it would be a simple transaction, but she got the shock of her life: Her name popped up on a terror watch list when the dealership pulled her credit report.

"I was actually waiting for the FBI to come charging in through the door with guns blazing!" Cortez told Koeppen.

The Treasury Department's Office of Foreign Assets Control -- known as OFAC for short -- keeps track of known terrorists, drug traffickers, and proliferators of weapons of mass destruction.

The current list has more than 7,000 names and aliases, and companies aren't allowed to do business with anyone on the list. In fact, they have to check the list before any credit transactions can take place.

The Sandra Cortez Koeppen spoke to came up as a possible match for Sandra Cortes Quintero -- an accused drug trafficker from Colombia. But besides their first names, no other information matched.

The Treasury Department admits the list generates false positives, but refused to tell CBS News how many innocent people have been affected.

"Virtually anyone in America could be on that list," says Phillip Hwang of the Lawyers' Committee for Civil Rights.

His organization put out a report documenting dozens of cases of consumers who were denied homes, health insurance, even the purchase of a treadmill because of an OFAC alert.

"You know, someone who happens to have the last names Lucas, Gibson, Diaz -- all of a sudden finds that they are being identified as potential terrorists, and it really creates a lot of anxiety and panic among consumers."

Recently released government documents show complaint after complaint from consumers caught up by the "No Buy" list, Koeppen points out.

One from a Naval officer reads, "Please tell me this was some mistake and you normally do not treat veterans of the U.S. military who served honorably ... in this fashion." Another man was confused with Saddam Hussein's son. Another says receiving an OFAC alert subjected him to "serious complications and humiliations."

"This is a very troubling practice," Hwang says, "and the federal government has a responsibility and a role to play, because they are the ones putting out the watch list."

But Treasury officials say it's not them; they say the problem stems from the OFAC matching databases supplied by the credit bureaus. They are among the companies that get paid to search the list and supply information to lenders.

Stuart Pratt, president of the Consumer Data Industry Association, tells Koeppen, "Congress said there had to be a list. And Congress said there's a law that lenders have to look at the list."

Pratt says the large fines and possible jail time for companies that do business with someone on the list forces his members to cast a wide net in their searches.

"OFAC," says Pratt, "needs to provide lenders with better guidance on what they're supposed to do to match data. The OFAC guidance says, 'Don't (establish a) match off of a single name,' but OFAC doesn't give you much guidance for what you're supposed to do when you have three names. ... And, by the way, for almost every record on the OFAC list, there are aliases, 'akas.' "

With the Treasury Department and the companies that provide OFAC alerts pointing fingers at each other, consumers such as Sandy Cortez are left to fend for themselves, Koeppen says.

She sued the credit bureau that provided her OFAC alert and has spent the past three years trying to clear her good name.

When Koeppen noted that, "The Treasury Department says, 'Yes, a few innocent people might get caught up in this, but it's for the greater good,' " Cortez asked, "How does putting OFAC alerts on my credit report, an accountant, a grandmother from Colorado, help national security?"

How do you get off the list once you're on.

It's not easy, that's for sure, Koeppen says. If you're applying for credit to buy something big, fill out your paperwork completely, and warn businesses when you walk in that you're popping up in the list, and it's a mistake.

[verifyfirst]

From OFAC''s website: "The Treasury Department has a long history of dealing with sanctions. Dating back prior to the War of 1812, Secretary of the Treasury Gallatin administered sanctions imposed against Great Britain for the harassment of American sailors. During the Civil War, Congress approved a law which prohibited transactions with the Confederacy...

OFAC is the successor to the Office of Foreign Funds Control (the FFC), which was established at the advent of World War II... initial purpose was to prevent Nazi use of the occupied countries'' holdings... and to prevent forced repatriation of funds belonging to nationals of those countries... The FFC played a leading role in economic warfare against the Axis powers by blocking enemy assets and prohibiting foreign trade and financial transactions.

OFAC... was formally created in December 1950, following the entry of China into the Korean War, when President Truman declared a national emergency and blocked all Chinese and North Korean assets subject to U.S. jurisdiction."

Let''s don''t blame everything on the Republicans or Democrats. I think there were Toreys and Whigs back in 1812, weren''t there?!?!?

[frankbowers]

That is where we need to get placed some if not all the illegal mexcican/hispanic aliens, then they would have to leave the US of A my country, the one t;hey are stealing from us daily.
GOOD THOUGHT BUT THE POLITICIANS WILL NEVER ALLOW IT TO HAPPEN AFTER ALL THEY WOULD LOOSE THEIR SUPPORT AND VOTES.
The best of good byes Frank Bowers of Austin, TX

[frankbowers]

AMENT TO THE BEN FRANKLINS QUOTE, AND LET US NOT FORGET THE RELIGIOUS MAJORITY BROUGHT US GW AND HIS SIDE KICK DIC WHO HAVE TRASHED OUR FREEDOMS AND OUR COUNTRY, ALL FOR OIL AND IT SEEMS THAT SADAM HAD CONTROL AND NOW AL QUIDA HAD NOW TAKEN CONTROL AND TOLD THE LITTLE BIG EARRED IDIOT AND HIS SIDE KICK DIC TO GO TO H3LL, AND THEY ALL SING 7 FOLD AMENS.
The best of good byes Frank Bowers

[ray696969]

you voted these idiots in office and only you can vote them out.

[republic1776]

"He who sacrifices freedom for security deserves neither."

Benjamin Franklin

[rwm2_2000]

THIS STUFF IS EXACTLY WHAT U''LL SEE ON INFOWARS.COM...They''ve been telling folks about the Patriot Act being just another trojan horse etc. The Democrat Party is just as guilty of things like this as the Republican party so don''t think one is better than the other.

[shanev137]

Along with racial-profiling, torture and warrantless search and seizure, this is the kind of stuff our Nazi police state loves.

Our dumb sheeple voted twice in a row to have their civil liberties and freedom tossed out the window.

[erehak]

Interesting that the article mentions the last names "Lucas, Gibson and Diaz". I wonder if George Lucas, Mel Gibson and Cameron Diaz are on the list!

[frankbowers]

This need to be on illegal alines. To h3ll with the supposely terror list I believe all illegals should be on the terror list after all they have came here with out permission and are stealing the nation blind with their little anchorbastards to stay.
SAD THE ILLEGALS ARE GIVEN A FREE PASSSSSS.
FRANK BOWERS

[docadams3]

It''s time to make individuals responsible for these bonehead decisions, and personally liable in court. There''s no excuse for this kind of stupidity. I''ve been on one of these stupid lists before myself, and got hasseled while flying on a federal grant!

[faith_in_w]

I bet Barrak Obama is on the list being mistook for Osama Bin Laden. I know I always do.

[gopack443]

Why would a drug trafficker need financing? That''s a very cash business.

[newsjunky5]

No trial to get on this list? Who decides who is guilty of terrorism and goes on this list? Do we even know his name? If his boss, or the President himself wants someone on this list, does he get on it?

[newsjunky5]

Wow, Nixon would have loved to have teeth like that on his famous "Shiit List."

[newsjunky5]

There is a guy running for local political office who I don''t like. He wants to end a government program that I have a lucrative business contract with. In fact, it keeps my business afloat. If I could just get him on this list he won''t get credit or be able to pay for campaign ads and posters. They''ll know it''s an error, but he just needs to be on for a little while, and the other guy will win. Then all will be OK.

[newsjunky5]

I own a small business. The competition is very tough and if I could just get them placed on this list it would stall their buying supplies for a week and I could soar past them and take their clients. Do I apply to the Department of Homeland Security, or the Treasury Department to do this?

[photogeezer]

This woman should give a brief description of this mess on the platform at the Democratic Convention. There is no excuse for these attacks on the civil liberties of decent American citizens. I don''t always agree with the ACLU, but I am planning to catch up my dues.