ACI Worldwide is set to pay $20 million as part of a proposed settlement with states related to lax data handling and erroneous transactions that resulted in previous penalties against the company levied by the Consumer Financial Protection Bureau (CFPB).

In June, ACI was ordered to pay $25 million by the CFPB over improper data handling that led to approximately $2.3 billion in erroneous mortgage payment transactions.

In a quarterly filing Thursday, the company disclosed it reached agreements in principle with all 50 states, the District of Columbia, and certain U.S. territories to settle similar charges.

The unauthorized transactions negatively impacted nearly 500,000 homeowners with mortgages serviced by Mr. Cooper, one of ACI’s largest customers, and caused many to incur overdraft fees, according to the CFPB.

The company said it was named as a defendant in seven class-action lawsuits filed on behalf of consumers whose mortgage accounts were affected by the inadvertent transactions. ACI said it reserved $5 million to settle these lawsuits and that an additional $1.5 million reserve could be required under certain circumstances.

At the time of the CFPB settlement, ACI said it “adopted additional controls, including automation, to prevent such errors from occurring” in future.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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