Mastercard and UniRush to Pay $13 Million for RushCard Breakdowns That Cut Off Consumers' Access to Funds
A rash of preventable failures by Mastercard and UniRush meant that many customers could not use their RushCard to access their own money
The Consumer Financial Protection Bureau (CFPB) took action this week against against Mastercard and UniRush for breakdowns that left tens of thousands of economically vulnerable RushCard users unable to access their own money to pay for basic necessities.
RushCard is a prepaid card advertised as a way to get direct deposits, including government benefits or payroll funds "up to two days sooner" by allowing deposits of that money onto the card. Mastercard Payment Transaction Services is the payment processor for the RushCard.
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.
In the weeks following this service disruption, the CFPB says that it received more than 800 complaints from RushCard users about the devastating impact it had on their personal finances. CFPB found that Mastercard or UniRush:
- Denied consumers access to their own money
- Botched the processing of deposits and payments
- Gave consumers inaccurate account information
- Failed to provide customer service to consumers impacted by the breakdowns
Given these findings, Mastercard and UniRush have been ordered to pay an estimated $10 million in restitution to tens of thousands of harmed consumers, create a plan to prevent future problems, and pay a $3 million civil penalty to the CFPB. Affected consumers are not required to take action to get restitution.
"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."
This is just the latest action that CFPB has taken to ensure that prepaid card and account users—and all consumers—can have confidence in the financial services and products they use. Later this year, a new CFPB rule on prepaid cards and accounts will go into effect. With this rule you will get clear, upfront information about your accounts so you can know before you owe and shop for the best deal. The rule will also make sure prepaid accounts are safer to use—whether you're swiping at the register, shopping online, or scanning your smartphone.