It’s been almost 2 weeks since some RushCard holders haven’t had access to their funds. And the only thing Russell Simmons can offer are prayers.
Praying for this who have been and those who still are affected by the tech change at Rushcard
— Russell Simmons (@UncleRUSH) October 17, 2015
When the company attempted to upgrade its system, various glitches occurred that interrupted user’s access to the card. Direct deposits weren’t posted and the card couldn’t be used at ATMs. Cardholders like the one below were pretty much left without money, if the RushCard was the only way they banked.
I have called @RushCard 51 times today. Hung up on 34 times. Dead Air 12 times. And the representatives all say call back in 2 to 3 hours.
— Portia (@Xenafan4ever) October 13, 2015
Many people with poor credit and bad banking history rely on these predatory pre-paid card company’s like RushCard as their banking alternative. But what they fail to realize is that they’d probably have better luck keeping their money in a mattress instead of paying money to use their money. On average, using the RushCard costs about $10.00 a month, not to mention the extra fees tacked on when it comes to withdrawing from an ATM.
“Prepaid cards have a good, bad and ugly to them,” said Joe Valenti, director of consumer finance at the Center for American Progress. “The market is making progress, and prepaid cards are evolving away from ‘gotcha’ fees to enable more people to get access to the banking system.”
In an email statement on Tuesday, Mr. Simmons said: “We will fix these problems and continue to serve the populations I care deeply about.”
The episode has now attracted the attention of regulators in Washington.
“It is outrageous that consumers have not had access to their money for more than a week,” said Gail Hillebrand, associate director for consumer education and engagement at the Consumer Financial Protection Bureau. “We are looking into this very troubling issue. Consumers increasingly are relying on prepaid products to keep their funds, make purchases and manage their money.”
RushCard said that its customers’ money was covered by Federal Deposit Insurance Corporation insurance through its issuing bank, MetaBank, and that its accounts were compliant with federal regulations regarding electronic fund transfers.
The company won’t say exactly how many cardholders it has, except to say they number in the “hundreds of thousands.”
The sad thing is, in the fine print of the cardholder agreement, the customers can’t even sue the company. One has to wonder how someone like Russell Simmons can advocate for this card. If this was an issue that Bank of America had, you know he’d put on his ‘social justice’ Phat Farm pants and attack the company.