(EXCLUSIVE) Russell Simmons To Settle Class Action Lawsuit with RushCard Holders Who Sued Him Over Financial Fiasco

Russell Simmons

Russell Simmons

theJasmineBRAND.com exclusively reports, Russell Simmons is reaching a settlement with the thousands of RushCard holders – when many went without access to their money due to a glitch with the technology at the music mogul’s company – which will have him paying out to each cardholder who sued in the numerous class action lawsuit.

Last year, Simmons was slapped with a class action lawsuit accusing him of fraud and breach of contract by customers of his RushCard prepaid debit card, with the class demanding he pay damages and restitution for the financial injuries he caused them.

The music mogul launched a prepaid debit card named RushCard back in 2003. The company explained the card,

has been providing access to the financial mainstream for 10 years.

The card allows those with lower income – who don’t normally qualify for traditional banking services – a full range of financial management tools including electronic pay, payroll direct deposit and various other services.

However, in October of last year thousands of card holders have been blocked from accessing their money on their RushCard for over a week and a half.

According to reports, the issue stemmed from a glitch in the computer system when the company decided to change to a new transaction-processing vendor.

This issue, resulted in Simmons being hit with the class action lawsuit by RushCard users. The plaintiffs said that beginning on October 12th they were not been able to access their money. The company has not fixed the glitch and it has caused the majority of those with the RushCard to suffer immense hardship including the inability to pay food, rent, electricity and gas.

Russell Simmons

Russell Simmons

They said that the customers who have regained the access to their accounts have realized the balances aren’t accurate and lower than the amount they actually have in them. Further, some customers say their entire accounts were wiped out and no money was left.

The suit explained,

Plaintiff’s and class members were fraudulently induced into purchasing RushCards and depositing money into their RushCard accounts because they were lead to believe their funds would be “safe and protected” with unhindered access to these monies.

They filed suit for negligence, fraud, breach of contract and violation of the New York deceptive acts and practices law. The cardholders demanded the court order Simmon’s company to pay restitution to those who suffered harm from not being able to access their cash, a judgement awarding damages and further damages for defendant’s knowing, willful and intentional conduct.

Then on March 11th, docs were filed by the plaintiffs explaining they want to put the brakes on the lawsuit. They say they are finalizing the terms of a settlement agreement with Russell and his company which will have the music mogul paying out money to each plaintiff in the numerous class action lawsuits he was hit with over the RushCard. They are confident in the settlement being signed and informed the judge they will be filing the agreement within the next couple weeks. The cardholders believe the settlement will be in their best interest rather than continue on with the lawsuit with Simmons. Once the deal is approved the case will be closed and all claims against the mogul and his company will be dismissed.

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Authored by: Kellie Williams