Russell Simmons‘ “Rush Card” customers experienced a rude awakening last October when they tried to use their accounts: their funds were inaccessible because of a computer glitch. Now, RushCard has agreed to pay a total of $20.5 million to customers who were temporarily locked out of their prepaid card accounts, according to court documents filed this week.
For a demographic comprised mostly of low-income users and people without bank accounts, the failure caused panic throughout the community. The glitch prevented users from accessing their funds and blocked transactions. As a result, those who needed money for everyday items were unable to access their accounts and those who used the cards to pay bills could not do so.
The Washington Post reports:
The preliminary settlement, which still needs court approval, includes about $19 million to reimburse customers for fees and other costs they faced after they lost access to their accounts for days. The remaining $1.5 million will go toward attorney fees.
RushCard, a prepaid card created by hip-hop mogul Russell Simmons, faced technical issues last October while it was transitioning to another payment processor. The glitch left more than 132,000 customers unable to access their accounts for several days. Some cardholders said they had transactions rejected or that they fell behind on bills.
“The company recognized that their service had caused frustration and unhappiness and damages [to cardholders],” said John Yanchunis, the lead attorney representing the plaintiffs in the class-action suit.
The card’s parent company, UniRush, is not out of hot water yet. It is currently under investigation by the Consumer Financial Protection Bureau; representatives were ordered to provide documents about the cause of the glitch. A spokesperson for the Bureau declined to comment on any potential ramifications.
SOURCE: Washington Post | PHOTO CREDIT: Getty
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Russell Simmons’ Rush Card Company Expected To Pay $20.5 Million To Customers was originally published on globalgrind.com