Payment Processor Fined $25 Million for Illegally Charging 500,000 Mortgage Customers

Processor for mortgage servicer Mr. Cooper mishandled data, initiated unauthorized charges

A payment processing company has been fined $25 million by the Consumer Financial Protection Bureau (CFPB) for data practices that resulted in $2.3 billion in unauthorized mortgage charges impacting 500,000 customers of mortgage servicer Mr. Cooper.

According to the enforcement action, ACI Payments is charged with negligent data handling practices that resulted in the processing of mortgage payments that were not previously authorized by customers. The mortgage payment charges resulted in significant negative impacts to customers, including insufficient funds charges at banks and missed payments. While the customers have since been made whole, the CFPB action creates a further penalty for ACI.

“The CFPB’s investigation found that ACI perpetrated the 2021 Mr. Cooper mortgage fiasco that impacted homeowners across the country,” said CFPB Director Rohit Chopra. “While borrower accounts have now been fixed, we are penalizing ACI for its unlawful actions that created headaches for hundreds of thousands of borrowers.”

Mr. Cooper was one of ACI’s largest mortgage servicing customers until at least 2021. Mr. Cooper services the mortgages of more than four million borrowers and collects their monthly mortgage payments. Many homeowners with mortgages serviced through Mr. Cooper chose to schedule their monthly mortgage payments using ACI’s Speedpay product, which allowed the company to automatically transfer homeowners’ authorized mortgage payments from their personal bank accounts to Mr. Cooper.

The impact of the mishandled data was far-reaching. ACI initiated approximately 1.4 million ACH withdrawals on behalf of Mr. Cooper from homeowners’ accounts on April 23, 2021, without a valid written authorization. This included initiating electronic fund transfers on days when they were not scheduled and initiating multiple transfers from the same accounts on the same day. The order notes that around 7300 customers saw their bank balances reduced by $10,000 or more overnight.

The CFPB's action requires ACI to take steps to improve its data practices and also assesses a $25 million penalty.

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