Creator of RushCard, Russell Simmons, Apologizes for Computer Glitch

Hip-hop mogul, Russell Simmons, created the RushCard in 2003 as a means of helping low-income people who don’t have access to a more traditional bank account, and don’t qualify for a credit card. Simmons wrote in an op-ed for the Daily News, “A decade ago, I watched poor and working-class families standing in long lines outside check-cashing stores, waiting for the privilege of paying to cash their paychecks…I thought there had to be a better way.” Now Simmons finds himself offering apologies to thousands of working-class people who, because of a computer glitch, have found themselves unable to access their money. Customers were adversely affected when software designed to “transition” accounts went awry. Simmons posted a video, explaining the software problem, acknowledging that although his team is working around the clock to solve the issue, it could well take “a few more days.”

Customers Angry at Inability to Access Money

One customer is a new mom who says she has been unable to access her paycheck, or any of her money, since the computer glitch. She says she has heard of people who are unable to put gas in their cars, leaving them stranded, or those who are facing eviction because they are unable to pay their rent. She calls the situation “ridiculous,” and notes “We trusted him (Simmons).” The RushCard Facebook page has gone crazy with disgruntled customers who are unable to access their money, even though the system is, apparently, back up and running.

What is the RushCard?

RushCard is a prepaid credit card, used by customers for a fee, to get cash from ATM’s, have their paycheck or IRS refund directly deposited to and pay bills. The card avoids overdraft fees and credit checks. According to the RushCard website, there are 68 million Americans who are unable to establish a traditional bank account. There is some debate over that number, as well as how many people actually use a RushCard. The company either does not keep tabs on how many customers they actually have, or they simply don’t want to say because questions to RushCard spokespersons regarding that number go unanswered. RushCard was one of the first prepaid cards which offered Direct Deposit and check-writing capabilities, as well as one of the first prepaid cards to offer cash loading at MoneyGram locations across the nation.

Benefits of the RushCard

The RushCard website advertises “comprehensive money management tools,” which help customers to track their balances, analyze their spending habits and create a workable monthly budget. RushCard offers two plans—the Unlimited Plan offers unlimited signature and PIN transactions for a monthly fee between $5.95 and $7.95 (depending on whether the customer is enrolled in direct deposit), and a pay-as-you-go plan which charges $1 per purchase with a maximum amount of $10.00.

Safe Financial Haven?

There is no minimum balance required for the RushCard, no credit check and an easy application process, as well as a one-time card activation fee of $3.95-$9.95, depending on the level of services. The consumer is then charged a monthly fee and transaction fee for each usage depending on their plan. The RushCard does not offer a line of credit like a credit card; customers must load the card with money in order to use it. Unfortunately, using the RushCard does not build credit history, however those with bad credit are still able to use the RushCard. RushCard partners with MetaBank and Visa, claiming to offer their members a “safe haven within the financial industry.” At this particular juncture, it is a sure bet that many RushCard customers would disagree with that characterization.

National Consumer Lawyers

If you have been unable to access your money or paychecks because of the RushCard computer glitch, you may have cause to file a claim. To learn more about your legal options or to schedule a free consultation call the Philadelphia consumer lawyers at Golomb & Honik today at 1-800-355-3300 or 1-215-985-9177 or fill out our confidential Contact Form.

The national consumer lawyers at Golomb & Honik have successfully represented individuals in Philadelphia, Pennsylvania, New Jersey, and throughout the United States.