Consumers Awarded $10 Million by CFPB for RushCard Fiasco

Consumers Awarded $10 Million by CFPB for RushCard Fiasco

February 1, 2017         Written By Bill Hardekopf

The October 2015 RushCard fiasco, which prevented thousands of consumers from accessing their money, will cost Mastercard and UniRush $13 million in payments and fines.

Today, the Consumer Financial Protection Bureau ordered the two companies to pay $10 million in restitution to the consumers affected by the breakdown. In addition, Mastercard and UniRush will pay $3 million to the CFPB Civil Penalty Fund.

In October 2015, RushCards, the popular line of prepaid debit cards from music entrepreneur Russell Simmons, experienced a technical glitch that left thousands without access to the funds in their accounts. The breakdown of the RushCard line, mostly used by unbanked Americans, took place when the company transitioned to a new payment processor, Mastercard. The fiasco caused many people to be unable to withdraw cash, get their paychecks or pay bills.

The CFPB determined that UniRush delayed processing direct deposits for more than 45,000 consumers, and did not process, or improperly returned, deposits of 2,000 others. Consequently, these consumers could not access their paychecks or government benefits. In addition, UniRush did not accurately transfer all accounts to Mastercard, so thousands of consumers could not access funds stored on their cards for a significant period of time. As a result, accounts of about 1,110 consumers were incorrectly suspended.

“Mastercard and UniRush’s failures cut off tens of thousands of vulnerable consumers from their own money, and threw some into a personal financial crisis,” said CFPB Director Richard Cordray. “The companies must set things right for consumers and make sure such devastating service disruptions are not repeated.”



The information contained within this article was accurate as of February 1, 2017. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


bill-hardekopf

About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
View all posts by Bill Hardekopf
Featured Low Interest Card
Top Features : 1.25X miles on every purchase; no annual fee; bonus of 20,000 miles once $1,000 is spent in first 3 months
Featured Cash Back Card
Top Features : 1.5% cash back on all purchases; $150 bonus after spending $500 in first 3 months
Featured No Annual Fee Card
Top Features : Earn cash back TWICE. 1% when you buy plus 1% as you pay; 0% APR for 18 months on balance transfers
Featured Bad Credit Card
Top Features : Perfect credit not required; Reports to major credit bureaus
Featured Fair Credit Card
Top Features : No annual fee; access to higher credit line after making first 5 monthly payments on time
Featured Limited/No Credit
Top Features : No annual fee; reports to major credit bureaus; access to higher credit line after making first 5 monthly payments on time