From The New York Times:

A sheaf of documents that a federal court forced the Treasury Department to release indicate there have been repeated complaints from American consumers who have been falsely linked to terrorism or drug trafficking during routine credit checks, the organization that sought the documents in a lawsuit said Tuesday.

The more than 100 pages of documents released Monday to the organization, the Lawyers’ Committee for Civil Rights in San Francisco, include a variety of complaints about the list maintained by the Office of Foreign Asset Control in the Treasury Department, said Philip Hwang, a lawyer for the group....

The documents include e-mail messages from a Navy veteran who had been unable to use the Internet service PayPal, and an 18-year-old who wrote to say that he was not a Libyan minister who was apparently on the list.

A client of a Maryland Toyota dealer reported being checked by a salesperson for tattoos because of a Treasury list match.

A Treasury Department official was baffled by the last claim, saying information on the list did not include physical characteristics....

Another official said the department did not have numbers on how many people might have been falsely identified, since institutions can check their clients’ identity against the list and ignore it if something like the date of birth obviously does not match the person in front of them.

Remember that, according to The Wall Street Journal, the Treasury Department feeds transaction information to the National Security Agency for their vast data driftnet. So it's possible that a mistake on that watchlist could have led to much more than an inconvenience during a credit check.

If you're curious, the Treasury Department posts its watch list here (pdf).