Virginia will receive $247,018.82 from the settlement.
While ACI was testing the Speedpay platform on April 23, 2021, it erroneously submitted live Mr. Cooper consumer data into the Automated Clearing House (ACH) system and attempted to withdraw mortgage payments from hundreds of thousands of Mr. Cooper customers on a day that was not authorized or expected. Many consumers were subjected to the attempted withdrawal of multiple mortgage payments from their personal bank accounts. Although the majority of withdrawals did not ultimately go through or were reversed, 1.4 million transactions totaling $2.3 billion were processed, impacting 477,000 Mr. Cooper customers.
ACI took corrective steps to minimize the impact of the testing error, but some consumers were unable to access affected money and were forced to incur overdraft or insufficient funds fees. Impacted consumers received restitution from ACI and through other related settlements.
State financial regulators investigated and negotiated the case. In a separate agreement, ACI will pay an additional $10 million. ACI Payments is a subsidiary of ACI Worldwide Corp. ACI 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 their monthly mortgage payments through the ACH system.
“ACI’s testing error was unacceptable and wildly inconvenienced hundreds of thousands of American consumers. Approximately 14,629 Virginians were affected by these unauthorized mortgage payments, resulting in unnecessary headaches and stress. Today’s settlement goes towards making sure this problem never repeats itself,” Virginia Attorney General Jason Miyares.
The investigation determined that the incident was possible due to significant defects in ACI’s privacy and data security procedures and technical infrastructure related to the Speedpay platform. The settlement also 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.
Virginians impacted by ACI’s testing error may submit claim forms in connection with a related class action settlement. Deadline for submission is November 13, 2023.
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Rebecca Barnabi
