Hip Hop star, Russell Simmons founded RushCard in 2003 to offer an alternative to high-fee prepaid cards to consumers. Last fall there were thousands of customers who were unable to use their money on the cards due to technical issues when RushCard converted its systems to a different processor. The problems caused an uproar on social media since they were not able to get any answers from the company. This prompted lawmakers and the Consumer Financial Protection Bureau to jump in.
Last fall RushCard advised they would set up a $2-$3 million fund to reimburse customers for their losses and inconvenience and this week, almost 6 months after the troubles started to occur. UniRush, the parent company of RushCard agreed to pay $19 million to settle this lawsuit with the affected cardholders.
The settlement, plus $1.5 million in lawyer’s fees is still subject to court approval but it does set aside enough to repay customers whose checks bounced or anyone who had to pay late fees since some accounts were unusable for over a week. Rick Savard, the chief executive of UniRush stated “We are pleased to have reached this preliminary settlement, which will resolve the claims of our cardholders. We believe this settlement fairly compensates our customers who were inconvenienced.”
This settlement will give 300,000 people the chance to recoup $100-$500 for any costs incurred from being locked out of their accounts. John Yanchunis, the lawyer for the cardholders stated “We’re very pleased with the result and the speed by which RushCard and the other defendants were able to settle this matter.”