A coalition of attorneys general from 50 states and territories announced a $20 million settlement with payment processor ACI Worldwide related to a 2021 testing error that created the unauthorized withdrawal of $2.3 billion from customers of Nationstar Mortgage (also known as Mr. Cooper).
ACI is a payment processor for a variety of third-party clients, including mortgage servicers. Mr. Cooper offered ACI’s Speedpay product for its customers to schedule their monthly mortgage payments, enabling automatic transfers of authorized mortgage payments from their personal bank accounts to Mr. Cooper.
However, on April 23, 2021, ACI Payments erroneously used live customer data in a test of its Speedpay platform, resulting in unexpected and sometimes multiple mortgage payments from customer accounts. As a result, consumers were billed for overdraft or insufficient funds fees. A total of 1.4 million transactions with a sum of $2.3 billion were processed, impacting 480,000 Mr. Cooper customers.
As part of the settlement, ACI will be required to use artificially created data rather than real consumer data when testing systems or software. It will also be required to segregate any testing, development or quality insurance work from its consumer systems, and the company must provide regular reporting for two years to a state regulator monitoring committee to ensure the company’s compliance.
“Any financial institution with access to billions of dollars needs robust and redundant security measures,” said Connecticut Attorney General William Tong, who led the coalition in the settlement agreement.
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