Forced faction change or realm transfer

Recently a guildmate told the guild officers of a situation in which he was contacted by a Game Master and told that he must realm transfer or faction change his character or risk losing the character due to a "file corruption" issue.

My guildmate claimed that he was able to log in normally but after a few minutes a GM initiated contact with him and asked him to log off completely so an issue could be resolved. He was told that the GM would contact him via email to notify him that he was able to log in again. The GM did contact him but told him that the issue could not be resolved. The GM continued that the character in question was lost due to a "file corruption error," but could still be realm transferred or faction changed free of charge and keep his gear, achievements, etc. The GM then explained that in 3 months he could transfer back, effectively restoring the character to its original state. My guildmate tells us that he did accept a faction change.

I believe that he made up this situation to avoid a confrontation with the guild. Is this situation possible from a technical standpoint? Is my guildmate telling the truth, or is this an elaborate deception by him? Honestly, I would not be surprised if he made the entire thing up as he isn't particularly trustworthy. Also worth noting is that his RL best friend (also a former guildmate) had almost the exact same situation happen to him - only it was before the days of faction changing.