RushCard Paying $20.5 Million to Clients Locked Out of Their Accounts
The settlement, which will still require the approval of the court, includes close to $19 million to be reimbursed to customers for the fees as well as other costs they had faced after losing access to accounts for a number of days. The other $1.5 million is to be paid in attorney fees.
RushCard is a prepaid card that was created by Russell Simmons the hip-hop mogul. It faced technical issues in October of last year while it transitioned to another processor of payments.
The glitch caused over 132,000 customers to be not allowed access to their accounts for a number of days. Some of the cardholders said they had their transactions rejected or they fell behind paying bills.
The company has recognized that the service they offered had caused unhappiness, frustration as well as damages to cardholders a lead attorney who represents the plaintiffs said about the class-action suit.
The attorney said he was pleased that UniRush, the RushCard parent company had agreed to settle, because it could have put into force an arbitration clause blocking consumers form filing class action suits.
The settlement includes payments as well as breaks that the clients have received already, including credits of $25 to some of its clients and what it called a fee holiday that was nothing more than waiving monthly fees for every customer’s from November through February.
The agreement called for RushCard to also reimburse clients for any of the fees they were charged between October 12 and October 31, the period they might have not had access to their accounts. However, some customers could qualify for more funds.
People facing other setbacks financially during that time that could not use their accounts, such as late payment fees and overdraft charges, will be able to file a claim and be compensated for such costs.
Customers are able to receive as much as $100 each even if they do not have paperwork that supports their claim. People that have documentation that prove losses could receive as much as $500 apiece.
However, in each case, consumers would have to subtract any of the other payments they might have received already from RushCard for the expenses.
Prepaid cards often times are used in place of checking accounts by workers in low income jobs or by people without bank accounts.