Attorney General Chris Carr and 49 attorneys general have entered into a $10 million multi-state settlement with payment processor ACI Worldwide over a 2021 testing error that led to the attempted unauthorized withdrawal of $2.3 billion from the accounts of mortgage-holders. The State of Georgia will receive $334,300.27 under the terms of this settlement.
“ACI’s testing error impacted the financial stability of nearly 20,000 hardworking Georgians,” said Carr. “This settlement helps to ensure appropriate safeguards are in place to protect consumer data and prevent this type of mistake from ever happening again.”
This case was investigated and negotiated with the state financial regulators, including the Georgia Department of Banking and Finance. The state regulators have entered into a separate multi-state settlement agreement and consent order with ACI for an additional $10 million, which will result in the State of Georgia receiving an additional $216,136.36 under the terms of this settlement.
“Today’s settlement shows the strength of the states acting collectively to ensure that ACI Payments makes the necessary improvements in its internal controls to protect customer data going forward,” said Georgia Department of Banking and Finance Commissioner Kevin Hagler.
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 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 its 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 the money at issue and were forced to incur overdraft or insufficient funds fees. Impacted consumers have received restitution from ACI and through other related settlements.
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 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 the use of artificially created data rather than real consumer data when testing systems or software. ACI is also required to segregate any testing or development work from its consumer payment systems.