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DIFS and Other State Regulators Settle with ACI Payments, Inc. for Unauthorized Transactions from Mr. Cooper Customer Accounts
October 18, 2023
FOR IMMEDIATE RELEASE: October 18, 2023
(LANSING, MICH) The Michigan Department of Insurance and Financial Services (DIFS) and 43 other state agencies have reached settlements with ACI Payments, Inc., for ACI Payments’ erroneous initiation of electronic transactions totaling $2.3 billion from the accounts of 480,000 mortgage-holders serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC). DIFS and Attorney General Dana Nessel, along with other state officials nationwide levied a combined total of $20 million in fines through a multistate enforcement action led by regulators from Arkansas, Connecticut, Maryland, and Texas with support from the Conference of State Bank Supervisors.
“Even though in this instance all consumers’ balances were restored, financial services entities hold trusted places in consumers’ lives, and we have no tolerance for companies that violate that trust and erroneously withdraw billions of dollars from customer accounts,” said DIFS Director Anita Fox. “Michiganders should feel confident that the companies we license follow the law, keep appropriate safeguards in place, and protect their customers’ money from unauthorized access. We thank our partners across the country for their collaboration on and contributions to this large-scale investigation.”
ACI Payments, a subsidiary of ACI Worldwide Corp., is a state-regulated money services business licensed in Michigan and nearly all other U.S. states. 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 or credit union accounts to Mr. Cooper. The violations occurred when ACI Payments erroneously used live customer data in a test of its Speedpay platform, causing unexpected, and sometimes multiple mortgage payments from customer accounts. In some cases, these transactions exposed consumers to overdraft or insufficient funds fees. Of the 480,000 accountholders affected, 14,584 were Michigan consumers.
Upon notification of the incident from ACI Payments, state regulators commenced a multistate money transmission investigation reviewing all aspects of the event, including investigating the facts and circumstances surrounding the erroneous transactions, evaluating consumer impact, analyzing the root cause of the incident, and evaluating the remedial steps taken by the company.
This enforcement action orders the following of ACI Payments, Inc.:
Risk and Compliance Programs: Maintain a comprehensive Enterprise Risk Management Program and a Third-Party Risk Management Program tailored to the nature, size, complexity and risk profile of ACI.
Agreement Monitoring: Regular reporting (for two years) to a state regulator monitoring committee to ensure both the adequacy of the risk management programs and compliance with the order.
Administrative Costs and Penalties: Payment of $10 million in fines for administrative costs and penalties.
State financial regulators license and supervise over 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers and debt collectors. Consumers can also verify that a company is licensed to do business in their state, and view past enforcement actions, by visiting NMLS Consumer Access. Michigan consumers who have questions or disputes that cannot be directly resolved with their financial services companies can contact DIFS at 877-999-6442 Monday through Friday from 8 a.m. to 5 p.m. or visit Michigan.gov/DIFScomplaints.
Read the enforcement action which includes the list of participating states.
The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries. In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan residents. For more information, visit Michigan.gov/DIFS or follow the Department on Facebook, Twitter, or LinkedIn.