The Consumer Financial Protection Bureau announced that it is fining MasterCard and the UniRush LLC $13 million for the outage in October 2015 that left cardholders without access to their funds.
In October 2015, a rash of preventable failures by Mastercard and UniRush meant that many customers could not use their RushCard to get their paychecks and other direct deposits, take out cash, make purchases, pay bills, or get accurate balance information. UniRush then failed to provide customer service to many consumers who reached out for help during the service breakdown. The CFPB has ordered Mastercard and UniRush to pay an estimated $10 million in restitution to tens of thousands of harmed customers. The CFPB also fined Mastercard and UniRush $3 million.
Read the press release here:
UniRush paid out $20.5 million in a settlement reached in May 2016 according to story and interview with Russell Simmons, RushCard’s found, on the site HipHopDX.
In the time since, Simmons made retribution his mission. He’s become more involved in the company over the past half year. He offered free service to RushCard holders for five months, which sacrificed much of the company’s profits. Earlier this month, a settlement was reached between RushCard users who sustained damages incurred during the service outage. What was initially reported to be a $2 to $3 million settlement, turned into $20.5 million. UniRush plans to pay $100 to $500 per claim, plus an additional $1.5 million in legal fees. While the number may seem staggering, Simmons is happy to make amends.
Read the story here:
The order comes the day after the announcement by Green Dot Corp. that it has agreed to purchase UniRush. It does not appear that the order will affect the deal.
The order shows how regulators seem to have a vendetta against the prepaid industry. Outages in debit and credit card programs have not drawn similar orders. Additionally, the earlier attempts to compensate cardholders do not seem to have had any effect at all on the deliberations of the CFPB.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
