Russell Simmons RushCard Fined $13 Million

Russell Simmons RushCard fined $13 Million

Cut the check! Russell Simmons’ RushCard is being fined and forced to pay restitution to customers that were affected by a 2015 outage that cut users off from their money. The Consumer Financial Protection Bureau ordered RushCard and its payment processor, MasterCard, to pay $10 million in restitution to customers as well as a $3 million fine.

In 2015, RushCard changed its payment processing company to MasterCard. The upgrade was handled improperly and resulted in a significant number of users cut off from their funds. The outage lasted for days, and, for some people, weeks. CFPB Director Richard Cordray said in a statement,

(Their) failures cut off tens of thousands of vulnerable consumers from their own money, and threw some into a personal financial crisis. 

Simmons apologized and took personal responsibility for the failure, and later used some of his personal fortune to cover customers’ expenses. The CFPB’s investigation found that both RushCard and MasterCard were jointly responsible for the problems RushCard’s customers faced. In its investigation, the CFPB found that MasterCard did not adequately test its systems before the conversion and denied RushCard’s request to conduct a full mock test of a conversion before it occurred. In a statement, MasterCard said they were

pleased to bring this matter to a close.

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