Old Dominion News

RICHMOND, VA – Attorney General Jason Miyares today announced that Virginia, along with a coalition of 49 other attorneys general, has reached 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 mortgage-holders’ accounts.  Virginia will receive $247,018.82 from the settlement. 

This case was investigated and negotiated with state financial regulators. The state regulators have entered into a separate agreement with ACI for an additional $10 million.  

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 their monthly mortgage payments through the Automated Clearing House (ACH) system. 

On April 23, 2021, ACI was testing the Speedpay platform when it 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, consumers were subjected to the attempted withdrawal of multiple mortgage payments from their personal bank accounts. While the vast 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.  

While ACI took corrective steps to minimize the impact of the testing error, in some cases consumers were not able to access affected money and were forced to incur overdraft or insufficient funds fees. Impacted consumers have received restitution from ACI and through other related settlements. 

“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,” said Attorney General Miyares.

The investigation determined that the April 2021 incident was possible due to significant defects in ACI’s privacy and data security procedures and technical infrastructure related to the Speedpay platform.  In addition to the $20 million payment to the states, today’s settlement 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 wish to submit claim forms in connection with a related class action settlement and must do so by November 13, 2023. More information on the class action settlement is available at https://achloanpaymentlitigation.com/

Original source can be found here.