The Washington PostDemocracy Dies in Darkness

More than 132,000 RushCard users were locked out of accounts for days

Russell Simmons speaks at the July 18 Rush Philanthropic Arts Foundation’s Art for Life Benefit in Water Mill, N.Y. (Scott Roth/Invision/AP)

The RushCard fiasco that left consumers without access to their prepaid card accounts for days affected more than 132,000 consumers, or about 30 percent of all RushCard customers, the company confirmed Monday.

All 442,400 customers were temporarily blocked from accounts during a planned outage during Columbus Day weekend when RushCard, a prepaid card company co-founded by hip-hop mogul Russell Simmons, transitioned to a new payment processor.

But 132,593 cardholders continued to see a “disruption” of some kind that blocked some users from accessing their accounts for days, including delays with money transfers and the erroneous deactivation of some cards, said Rick Savard, the chief executive of RushCard’s parent company UniRush in a letter to lawmakers last week.

The total number of RushCard customers, and a tally of how many people were affected, haven’t previously been disclosed because RushCard is a privately held company. But the figures were included in a written response to senators Sherrod Brown (D-Ohio) and Bob Menendez (D-N.J.), who asked UniRush to provide more information about what it was doing to help consumers who had been locked out of their accounts by the technical issues. Savard said the consumers affected by the outages included 5,536 people in Ohio and 4,834 in New Jersey.

Brown urged UniRush on Monday to cooperate with an investigation from the Consumer Financial Protection Bureau, which has requested documents and other information to determine what caused the outage and what RushCard was doing to compensate consumers. “The thousands of RushCard customers who couldn’t access their accounts to get their paychecks, buy groceries, pay bills or pay rent deserve a much better explanation of how the company will make amends,” Brown said in a statement.

The card company petitioned to push back the deadline for compiling the information to Jan. 15, from Nov. 10, calling the request “broad” and”overly burdensome.” But the bureau denied the request last week, noting that the company has failed to engage with the agency in a “meaningful way” or to provide a specific timeline for when it might be able to provide the documents. “We are committed to working cooperatively with the CFPB and have already begun to produce the documents they’ve requested,” a RushCard spokesman said Monday.

RushCard announced in October that it would create a multimillion-dollar fund to compensate customers who faced financial issues after being locked out of their accounts. But Brown asked the company to provide more details on what customers need to do to file a claim and how long it might take for people to receive assistance.

A RushCard spokesman said Monday that the company has started to compensate customers, even hand delivering cash in some cases, but he wouldn’t specify how many people had received payments. Simmons said in a separate letter to Brown and Menendez that the company was working to help those affected by tripling its call center staff and waiving fees for all customers between Nov. 1 and the end of February.