Attorney General Phil Weiser announces $10 million multistate settlement with payment processing company over attempted unauthorized withdrawals
Oct. 17, 2023 (DENVER) – Attorney General Phil Weiser joined a coalition of 50 attorneys general announcing a $10 million settlement with payment processor ACI Worldwide over a 2021 testing error that led to the attempted unauthorized withdrawal of $2.3 billion from mortgage accounts. Colorado will receive over $300,000 from the settlement.
“No financial institution should ever withdraw even one penny without their customers’ authorization, let alone thousands of dollars,” Weiser said. “I’m proud that this bipartisan group of attorneys general and state regulators acted to hold accountable ACI and ensure that it takes commonsense steps to prevent this incident from happening again.”
ACI Payments is a third-party payment processor for a variety of clients, including mortgage servicer Mr. Cooper (formerly Nationstar Mortgage Holdings), which offered ACI’s Speedpay product to its customers to schedule and electronically pay their monthly mortgage payments. State regulators investigating the case determined the 2021 incident was due to significant defects in the company’s privacy and data security procedures and technical infrastructure related to the Speedpay platform.
On April 23, 2021, ACI was testing the Speedpay platform when it erroneously submitted live Mr. Cooper consumer data into its 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, consumers were subjected to the attempted withdrawal of multiple mortgage payments from their personal bank accounts.
Though most 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, including well over 10,000 customers in Colorado. While ACI took corrective steps, in some cases consumers were unable to access their money and incurred overdraft or insufficient funds fees. Affected consumers have received restitution from ACI and through other related settlements, though this settlement does not preclude additional consumer restitution from the settlement funds.
In addition to the payment to the State, the settlement requires ACI to take steps to avoid any future incidents, including requiring the company to use filler data rather than real consumer banking information when testing systems or software, and requiring segregation of any testing or development work from consumer payment systems.
The $300,000 ACI will pay under the settlement can be used for any restitution where possible, consumer education, consumer fraud or antitrust enforcement, or efforts to advance the public welfare.
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