Clients of Payza, operating as MH Pillars, in at least 29 US states can no longer access their funds. The US Department of Homeland Security seized all deposits held with Ultralight Financial Services, the licensed money transmitter announced today.
Payza had previously informed its affected clients that their funds were secure and safeguarded under state regulatory guidelines. However, Payza claimed it could not complete withdrawal or transfer requests. The company stated Ultralight Financial Services, formerly known as Obopay Inc., was withholding funds and refusing to process customer transactions. Payza described Ultralight FS as its agent for US payment services.
Payza alleged Ultralight FS, following a management and name change, refused to release client money. Payza reported repeated, unsuccessful attempts to resolve the issue with Ultralight FS management, legal team, and state regulators. It stated it was pursuing legal action against Ultralight FS, Obopay Inc., their officers, and CEO Carol Realini. Payza informed clients that state regulators would not intervene without direct contact from fund owners. The company provided a template message for clients to send to their state regulators, demanding action from both Ultralight FS and the regulatory body.
This stance from Payza directly contradicts an announcement Ultralight FS published on its own website today. Ultralight FS informed "MH Pillars dba Payza customers" that "The US Department of Homeland Security has seized all MH Pillars dba Payza money on deposit with UltraLight FS." The announcement added that more information would be published as it became available.
Reports from Payza customers initially indicated fund inaccessibility across 29 US states. The Ultralight FS announcement now suggests a broader federal intervention.