On Tuesday, Florida Attorney General Ashley Moody announced she helped secure $10 million from a mortgage-payment processor for collecting or attempting to collect unauthorized withdrawals from 477,000 consumers–of which almost $745,000 will head to Florida.
The payout comes after Moody and 49 other attorneys general finalized an agreement with ACI Worldwide over a 2021 testing error. The error led to attempted unauthorized withdrawals from the accounts of mortgage holders. The majority of the withdrawals did not go through or were reversed; however, impacted consumers did receive restitution from ACI and through other related arguments.
“Due to this company’s error, more than 470,000 consumers experienced multiple mortgage payment withdrawals. This put an undue burden on many consumers who incurred overdraft or insufficient funds fees. We have now secured $10 million for the states from the company, and we are requiring them to take steps to avoid future errors,” said Moody.
ACI Payments, a subsidiary of ACI Worldwide Corp., is a payment processor for a variety of third-party clients, including mortgage servicers. Nationstar Mortgage, known publicly as Mr. Cooper, offered ACI’s Speedpay product to its customers so they could schedule and electronically pay monthly mortgage payments through the Automated Clearing House system. On April 23, 2021, during an ACI test, the Speedpay platform erroneously submitted live Mr. Cooper consumer data into the ACH system. This resulted in ACI erroneously attempting to withdraw mortgage payments from hundreds of thousands of Mr. Cooper customers on a day that was not authorized or expected.
In many cases, the company subjected consumers to the attempted withdrawal of multiple mortgage payments from personal bank accounts. While the vast majority of withdrawals did not ultimately go through or were reversed, ACI processed 1.4 million transactions—impacting 477,000 Mr. Cooper customers. While ACI took corrective steps to minimize the impact of the testing error, in some cases consumers could not access the money at issue and incurred overdraft or insufficient funds fees. Impacted consumers received restitution from ACI and through other related agreements. Floridians affected by ACI’s testing error may also wish to submit claim forms in connection with a class-action settlement and must do so by Nov. 13. For more information, click here.
The investigation by the states determined that the April 2021 incident occurred due to significant defects in ACI’s privacy and data security procedures and technical infrastructure related to the Speedpay platform. In addition to the payment to the states, today’s agreement requires ACI to take steps to avoid any future incidents, including requiring ACI to use artificially created data rather than real consumer data when testing systems or software, and requiring ACI to segregate any testing or development work from its consumer payment systems.
Moody and the attorneys general of the following states and territories are joined in this action: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
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