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The RushCard debacle should lead to consumer improvements, but it should not undercut the progress prepaid has made in helping consumers manage their finances.
October 29 -
UniRush's transition to a new processor caused major service interruptions for users of its popular RushCard prepaid products.
October 21 -
UniRush plans to lower the fees on its reloadable prepaid cards. The plan was disclosed Tuesday afternoon on the Twitter account of UniRush founder and music mogul Russell Simmons.
January 24
WASHINGTON — More than 442,400 consumers were affected by the Oct. 12 glitch that froze RushCard users' funds after a payment processor switch, the company told lawmakers.
Among them, 132,593 also experienced "residual disruption" beyond the initial lockdown of several hours, according to a Nov. 30 statement signed by Russell Simmons, the hip-hop scion and cofounder of RushCard's parent company UniRush.
The Cincinnati-based prepaid debit card company also announced that it had set up a reimbursement program. RushCard, Simmons wrote, is delivering "courtesy credits to cardholders who were significantly impacted and … providing reimbursement to users who explain how the disruption and residual issues caused them harm."
The letter did not specify how much the company would spend on restitution, or how the claims process would be organized.
RushCard also said it was implementing a fine-free period between Nov. 1 and Feb. 28, which it said would amount to about $15 million in cancelled fees.
Sen. Sherrod Brown, D-Ohio, and Sen. Bob Menendez, D-N.J., penned a letter on Nov. 5 asking RushCard's chief executive Rick Savard to detail his company's response to the glitch.
In a Dec. 7 press release detailing RushCard's response, Brown said, "The thousands of RushCard customers who couldn't access their accounts to get their paychecks, buy groceries, pay bills, or pay rent deserve a much better explanation of how the company will make amends."
