There seems to be an issue when looting an enemy faction member that you have NOT aggro'd. For example, I fought an opposing member the other day in town, and after killing him I had no problems looting. However, today a friend of mine who is in an opposing faction was killed while not paying attention. I came up to loot his body for him and i went grey each time I moved something around on his corpse. If i'm correct it should not work this way. I should be able to loot any opposing faction member at any time regardless of whether we were engaged in combat with one another or not.
This is a known issue and is being worked on, hopefully for the next patch. (We have approximately 20 very specific notoriety issues to resolve, so it might take a patch or two to knock them out) Thanks for the report.
I do not know much of factions, however, I was reading up on the factions guide (url & caption below) and was wondering if it was talking about the same thing OP mentioned. http://www.uorenaissance.com/phpBB/viewtopic.php?f=18&t=292 Looting Players in opposing factions are unable to party (and therefore unable to loot each other according to party rules). The rules for looting follow the order of lawful aggression - reputation, guild, faction. For example, faction members cannot freely loot a faction mate. If the faction mate is red or criminal however, reputation takes precedence and the faction mate would be lootable. Likewise a faction mate would also be attackable and lootable should the faction mates be in warring guilds (guilds taking precedence over factions.) Following these rules, faction members can only loot faction opponents whom they helped kill. Faction members killed by faction guards are lootable by any member in the same faction as the guards. Again, I really have not ever played a part in factions (died 1x after joining), so I have no idea how it should or should not be. I simply came across, what appeared to be, two different, yet familiar, statements.