Russell Simmons And Rushcard Fined For $13 Million!

Comedy News

Cut the check! Russell Simmons’ RushCard is being fined and forced to pay restitution to customers that were affected by a 2015 outage that cut users off from their money. The Consumer Financial Protection Bureau ordered RushCard and its payment processor, MasterCard, to pay $10 million in restitution to customers as well as a $3 million fine.

In 2015, RushCard changed its payment processing company to MasterCard. The upgrade was handled improperly and resulted in a significant number of users cut off from their funds. The outage lasted for days, and, for some people, weeks. CFPB Director Richard Cordray said in a statement,

Simmons apologized and took personal responsibility for the failure, and later used some of his personal fortune to cover customers’ expenses. The CFPB’s investigation found that both RushCard and MasterCard were jointly responsible for the problems RushCard’s customers faced. In its investigation, the CFPB found that MasterCard did not adequately test its systems before the conversion and denied RushCard’s request to conduct a full mock test of a conversion before it occurred.

 

For RushCard, the CFPB found the company failed to adequately train and staff up customer service lines after the failure and failed to do adequate testing on its end before the conversion happened.

Under the terms of the order, which is in addition to a class-action settlement RushCard reached last year, RushCard customers impacted by the outage will receive awards based upon the damage the outage caused to them. If a deposit was delayed because of the outage, a customer would receive $100, while a customer who had a returned deposit would receive $250, the CFPB said. Customers who experienced a denied transaction will get $25 and customers who received incorrect balance information will get $100. Because of the various ways the RushCard outage impacted its thousands of customers, the amount of damage will vary from customer to customer.

There’s no timeline on when RushCard customers will receive their payments. Current RushCard customers will receive their money in the form of an account credit while former customers will receive a check. Customers do not need to take any action to receive their money, the CFPB said.

As previously, RushCard was sold to Green Dot, a major prepaid debit card company, for $147 million. As part of that deal, RushCard agreed to remain liable for any investigations or lawsuits stemming from the failure. Green Dot said it plans to keep the RushCard brand, despite the 2015 technological failure.

Source; The Jasmine Brand

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