RushCard, Mastercard Fined Over 2015 Customer Lockout

By Yuka Hayashi 

WASHINGTON -- UniRush LLC and a unit of Mastercard International Inc. agreed to settle charges by a federal regulator that "preventable failures" by the companies caused a 2015 debacle in which tens of thousands of customers lost access to their prepaid-card accounts, setting off a cascade of unpaid bills.

The Consumer Financial Protection Bureau said the two companies are paying an estimated $10 million to customers affected by the temporary lockup of their accounts caused by a technical glitch. The companies are also paying a civil penalty of $3 million.

UniRush is the program manager of RushCard, a major prepaid-card business founded by hip-hop producer Russell Simmons . Mastercard Payment Transaction Services, a unit of Mastercard International, is the payment processor of RushCards.

"We are pleased to bring this matter to a close, allowing us to further enhance the best practices, policies and procedures for prepaid cards," a Mastercard spokesman said. He added that the company understands "the critical role prepaid cards play in how people manage their money."

UniRush couldn't immediately be reached for comment.

Green Dot Corp., a prepaid-card company, said Monday that it reached a deal to buy UniRush for $147 million.

Write to Yuka Hayashi at [e-mail]

(END) Dow Jones Newswires

February 01, 2017 13:40 ET (18:40 GMT)

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