The bill came due today for last year's RushCard meltdown that left thousands of consumers unable to access their money to pay for basic necessities. The Consumer Financial Protection Bureau ordered Mastercard and UniRush to pay $10 million in restitution to consumers and fined them $3 million.
In the breakdown last October, a rash of system 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 adequate customer service to many consumers who reached out for help during the service breakdown, the CFPB said.
“Mastercard and UniRush’s failures cut off tens of thousands of vulnerable consumers from their own money, and threw some into a personal financial crisis,” said CFPB Director Richard Cordray. “The companies must set things right for consumers and make sure such devastating service disruptions are not repeated.”
RushCard, co-founded by entrepreneur Russell Simmons, is advertised as a way for consumers to get direct deposits on their card “up to two days sooner.” These deposits include government benefits or payroll funds.
In 2014, UniRush picked Mastercard as its new payment processor. Mastercard and UniRush spent 13 months preparing to switch to Mastercard’s processing platform, which ultimately took place Oct. 10-12, 2015, and did not go smoothly. At the time of the switch, RushCard had about 650,000 active users, of which about 270,000 received direct deposits on their RushCard.
Mastercard and UniRush’s actions before, during, and after the changeover harmed tens of thousands of consumers. The CFPB received about 830 consumer complaints from RushCard users in the weeks that followed the switch in payment processors.
Among other failures, the CFPB found that UniRush:
Denied consumers access to their own money: UniRush did not accurately transfer all accounts to Mastercard. As a result, thousands of consumers could not access funds stored on their cards for days, or in some circumstances, weeks.
Botched the processing of deposits and payments: UniRush delayed processing direct deposits for more than 45,000 consumers and did not process, or improperly returned, deposits of 2,000 others. As a result, consumers could not access their paychecks or government benefits.
Gave consumers inaccurate account information: Mastercard did not make sure it was sending accurate information about consumers’ account balances to UniRush when it declined to authorize certain transactions. Some consumers received incorrect information telling them that their account balances were zero when they actually had funds stored on their cards.
Failed to provide customer service to consumers impacted by the breakdowns: UniRush did not have an adequate plan to step up its customer service response to meet the increased demand caused by service disruptions. Some consumers who called customer service waited on hold for hours and could not obtain critical information about the status of their funds and accounts.
What to do
Under the terms of the Bureau’s order, the amount each consumer will receive depends on the particular failure the consumer experienced. UniRush will send funds to affected consumers. Individual consumers do not have to take any action to receive the restitution, which will be based on UniRush records.