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MasterCard and UniRush Ordered To Pay $13 Million

— February 2, 2017

MasterCard and UniRush are ordered to by -The Consumer Financial Protection Bureau to pay a total of $13 million in damages.

Nothing is more frustrating than being in the middle of a transaction and realizing one’s debit card is getting declined.  If the funds should be in the account, searching for a reason for the decline can be downright maddening.  Customers are continuing to line up as the card holder tries again and again to pay without luck.  Eventually, the dejected customer is forced to leave already bagged goods behind and exit the store empty handed.  Discovering after the fact that the reason behind the card wouldn’t process is actually the result of a significant technical oversight by the card provider is, no doubt, especially disappointing. These things aren’t supposed to happen.  If a consumer has the funds to pay for goods he or she wishes to buy, the funds should be available when they need to be accessed.  Simple as that.

Image Courtesy of MasterCard
Image Courtesy of MasterCard

In October 2015, Mastercard’s RushCard system went down as it was switching over to a new processing platform.  Mastercard and UniRush had spent just over a year, roughly thirteen months, preparing for this transition, which needed to go smoothly due to the number of customers using prepaid reloadable debit cards.  However, somehow MasterCard failed to provide UniRush with accurate balance information in its customers’ accounts.  And, as a result, during the switch, customers were unable to access their money on their RushCard prepaid cards.  This wasn’t just a few painful minutes of anxiously waiting for the money to reappear.  Many consumers were unable to access their funds for several days, and up to weeks in some cases.  More than 45,000 customer deposits were delayed and many transactions were declined.  Tens of thousands of customers were cut off from their money, which caused significant financial woes for many.  UniRush had about 650,000 users at the time, of which 270,000 of them or roughly 41 percent, used the cards for direct deposits and were affected by the crisis.

Image Courtesy of ScienceBlogs
Image Courtesy of ScienceBlogs

Russell Simmons, the superstar reality TV show persona behind UniRush, and MasterCard have been ordered by The Consumer Financial Protection Bureau to pay a total of $13 million in damages.  The two companies are required to pay $10 million to customers in restitution fees and another $3 million in penalties.  This doesn’t necessarily restore blind faith in the system, however.  Although, the CFPB’s order to hold the companies accountable is a great slap on the wrist, what’s to stop it from happening again?  Who’s to guarantee there won’t be another glitch?  Especially since, on January 30th, GreenDot, an issuer of MasterCard and Visa cards with products available at more than 60,000 retail stores, announced its plans to buy UniRush for $147 million.  The deal is expected to close in the first quarter 2017.  GreenDot was investigated by a Senate panel in 2014 for shady dealings, and another transition only means more uncertainty.

Simmons, co-founder of Def Jam Records, said in a statement, he is grateful for the loyal customers that stood by him during “one of the most challenging periods” in his professional career.  A spokesperson from MasterCard has also indicated the enterprise is happy to have finally brought closure to the matter.  


Consumer agency fines Mastercard, UniRush $13M over prepaid cards

Russell Simmons’ UniRush, MasterCard must pay $13M

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