RELEASE: REGULATORS ANNOUNCE SETTLEMENT WITH ACI PAYMENTS, INC. FOR UNAUTHORIZED WITHDRAWALS FROM CUSTOMER ACCOUNTS (2024)

Posted on Oct 17, 2023 in DFI, News Releases, OCP

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

KA ʻOIHANA PILI KĀLEPA

Division of Financial Institutions

JOSH GREEN, M.D.
GOVERNOR | KE KIAʻĀINA

Combined fines of $20 million for data misuse impacting 480,000 consumers nationwide

HONOLULU — The Hawai‘i Department of Commerce and Consumer Affairs’ (DCCA) Division of Financial Institutions announces settlement agreements with ACI Payments, Inc., a payment processor, for erroneously initiating electronic withdrawals totaling $2.3 billion from the accounts of 480,000 mortgage-holders serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC).

State financial regulators levied $10 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. Additionally, the Hawaiʻ’i Office of Consumer Protection and 50 attorneys general, including the Hawai‘i Attorney General, levied $10 million in fines to ACI, in coordination with state regulators.

ACI Payments, a subsidiary of ACI Worldwide, is a state-regulated money services business licensed in Hawai‘i and nearly all other U.S. states (NMLS ID 936777). 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. 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.

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 circ*mstances surrounding the erroneous transactions, evaluating consumer impact, analyzing the root cause of the incident, and evaluating the remedial steps taken by the company.

“We are holding ACI accountable for its significant error. This enforcement action and penalties sends a strong message to the industry to be responsible with customer data,” said Iris Ikeda, Hawai‘i Commissioner of Financial Institutions. “The correction of this error resulted in over $9 million in duplicative payments returned to affected Hawai‘i consumers.”

A total of 4,109 Hawai‘i consumers were affected. In 2022, ACI Payments conducted 112,000 transactions within the state valued at approximately $60 million.

The 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 to the multistate regulators.

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 escrow depositories,

Hawai‘i consumers can submit complaints about nonbank financial services companies by contacting the Hawai‘i Division of Financial Institutions at (808) 586-2820 or by email at [emailprotected]. 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.

Read the state regulators enforcement action HERE.

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Media Contact:
William Nhieu
Communications Officer
Department of Commerce and Consumer Affairs
[emailprotected]
Office: (808) 586-7582