Hip hop impresario and RushCard (an Accredited Partner) co-founder Russell Simmons is telling RushCard (an Accredited Partner) members that all systems are back in operation and their prepaid MasterCards should be working normally.
Not every RushCard (an Accredited Partner) customer agrees, however. In a ConsumerAffairs submission yesterday, Antoinette of Columbus, Ohio, said she still could not access her account.
"I call it a big screwup, nothing is working since the update, you dont know when you will receive your money," she said. "I thought they would have corrected it by now. You can't reach anyone on the phone, it hangs up on you automatically."
Simmons said the company is working as quickly as possible and will "reimburse cardholders who experienced financial losses."
"RushCard (an Accredited Partner) and I continue to be completely committed to making sure each and every one of our customers is made whole," Simmons said in a prepared statement. "I want my customers to know that we will restore RushCard (an Accredited Partner) as the gold standard of services and trust in our community. While the reimbursement and review process will not occur overnight, we will act as quickly as regulators will allow and are already doing so on a case-by-case basis."
In some cases, consumers said that while they were unable to access their funds, unauthorized withdrawals left their account drained when service was restored.
"I have funds deposited directly to my RushCard (an Accredited Partner) and my card was hacked while 'system issues' ensued and fraudulent charges were made on my card," said Jody of Hampton, Va., in a posting to ConsumerAffairs. "I still can't access my money! I'm paid bi-weekly, and it's now three pay periods that have passed. ... I've had bills attached to that card, disconnect services and charge fees."
The idea behind prepaid cards is that they're supposed to serve "unbanked" consumers, those who for whatever reason don't have a full-fledged bank account. A prepaid card is generally much cheaper than an account at a commercial bank but since there are no branches, customers are cast adrift when problems arise, as happened in the RushCard (an Accredited Partner) saga.
While RushCard (an Accredited Partner) has generally enjoyed good relations with its customers and with consumer groups, the service disruption has brought calls for tighter regulation of prepaid cards.
"This incident highlights uncertainties about an obvious question: What, if any, laws are violated if a consumer cannot get access to his or her money?" the National Consumer Law Center asked in a letter to federal regulators. "Certainly, any failure to let consumers spend their own money could be an unfair, deceptive or abusive practice. But more specifically, if this problem had happened to bank accountholders, we believe that the failure to make deposited funds available for withdrawal could have been a violation of Regulation CC under the Expedited Funds Availability Act."
The non-profit consumer advocacy group said tougher rules are needed.
"Prepaid cardholders, who tend to be low income, especially need prompt access to the funds they deposit on prepaid cards. It should also be made clear that Regulation CC gives consumers a right to have access to their funds on an ongoing basis and not only to have initial availability after a deposit clears," NCLC said. "Prepaid cardholders need as much or more robust protection as the holders of bank accounts. But in our current system, they have less."