The thousands of unbanked consumers who rely on prepaid RushCards but have been unable to access their funds because of a technical glitch, may receive compensation for the issue.
RushCard announced Thursday that it plans to reimburse cardholders who lost money during the recent weeks-long disturbance during which customers say they were denied access to their funds, or had accounts that incorrectly showed a $0 balance, the New York Times reports.
The company says it is in talks with regulators about creating a reimbursement fund for affected cardholders.
Details of the fund – including how many RushCard users were impacted and what they can expect to recoup – were not released, and likely won’t be until regulators approve the reimbursement plan.
“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,” Russell Simmons, RushCard’s co-founder, said.
RushCard previously said access to funds had been restored for most customers, but the Times reports the company is still working with Meta Bank, which issues the cards, and MasterCard to resolve the issues.
Problems with the RushCard first surfaced late on Oct. 11, when the company experienced a disturbance during a “technology transition.”
“During this process, many of our customers were adversely affected when the technology that was used to transition their accounts did not work as planned,” RushCard CEO Rick Savard said in a statement at the time. “RushCard is working around the clock to resolve all of these matters.”
Since the incident began, the company has provided several updates on Twitter, including one that announced it would wave all fees for new and current users between Nov. 1 and Feb. 29, 2016 as an incentive to stay with the company.
Consumer advocates and regulators have also taking issue with the RushCard debacle.
CFPB director Richard Cordray issued a statement regarding the problem, noting that the agency would take director action “to get to the bottom of this situation.”
A coalition of consumer groups also chimed in, pointing at the incident as evidence that federal regulators need to do more to protect prepaid cardholders.
Additionally, Consumer Reports announced last week that it would suspend its RushCard recommendation in light of the company’s technical issues.
RushCard Says It Will Reimburse Customers [The New York Times]
by Ashlee Kieler via Consumerist
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