New York City – Prepaid debit card company RushCard has agreed to pay up to $20.5 million to customers who were temporarily locked out from their accounts last year. The settlement stills needs to be approved by a court of law.
The preliminary settlement includes $19 million to reimburse customers for fees and other costs they faced due to the system malfunction. The issue lasted for days and customers demanded a settlement for their trouble and of course, a full refund. The remaining $1.5 million will be destined towards attorney fees, as reported by the Washington Post.
RushCard, owned by hip-hop mogul Russell Simmons, created discomforts and losses among their customers last year. Because some technical issues the company experienced while it was transitioning to another payment processor. Thousands of customers presented problems to access their money for as long as two weeks.
The likely-to-be-approved settlement by RushCard in New York says that the company will pay at least $100 to each affected user by last year technological fiasco. The amount could increase up to $500 if the person has documented evidence of the losses.
“We are pleased to have reached this preliminary settlement which will resolve the claims of our cardholders,” said Rick Savard, CEO of Unirush, the parent company of RushCard. “We believe this settlement fairly compensates our customers who were inconvenienced,” he added.
Consumers will receive notices in the mail after the court has given the settlement a preliminary approval, according to John Yanchunis. John is currently the lead attorney representing the plaintiffs in the class-action suit. Yanchunis said the approval should be likely to obtain since the plaintiffs have already accepted the deal. After the final approval, which could take between four to five months, the cardholders could start receiving the payment.
Russell Simmons To Reach Settlement In RushCard Lawsuit – UPDATE: Thousands of RushCard users were unable to ac… https://t.co/PFlaTIxsn2
— 103.7 THE BEAT (@1037THEBEATCHI) March 16, 2016
Ongoing investigation for RushCard
After many angry customer started to complain the lack of access to their accounts, the Consumer Financial Protection Bureau (CFPB) requested documents and information to RushCard to investigate the possible reason for the outage.
Authorities were also investigating what the company was doing to compensate the customers for their troubles. The prepaid debit card company asked for more time to provide the documents but the agency denied the request and remains unclear whether the CFPB will be taking some actions of their own.
Source: The Washington Post