CFPB Fines Mastercard, UniRush $13M

The Consumer Financial Protection Bureau (CFPB) announced Wednesday (Feb. 1) that it took action against Mastercard and UniRush for alleged breakdowns that the government watchdog said left tens of thousands of economically vulnerable RushCard users unable to access their own money to pay for basic necessities.

In a press release announcing the action, the CFPB said in October 2015 a rash of preventable failures by Mastercard and UniRush meant that many customers could not use their RushCard to get their paychecks and other direct deposits, take out cash, make purchases, pay bills or get accurate balance information. The CFPB went on to contend that UniRush then failed to provide customer service to many consumers who reached out for help during the service breakdown. The CFPB has ordered Mastercard and UniRush to pay an estimated $10 million in restitution to thousands of harmed customers. The CFPB also fined Mastercard and UniRush $3 million.

“Mastercard and UniRush’s failures cut off tens of thousands of vulnerable consumers from their own money and threw some into a personal financial crisis,” said CFPB Director Richard Cordray in the press release. “The companies must set things right for consumers and make sure such devastating service disruptions are not repeated.”

In a statement, Mastercard responded by saying, “We understand the critical role prepaid cards play in how people manage their money. We’ve developed these products and worked with our customers and partners to ensure consumers can maximize the payments choices and benefits available to them. Today’s agreement with the CFPB provides RushCard customers adversely affected by the October 2015 event with an opportunity to be further compensated for inconveniences caused during the service disruption.”

“We are pleased to bring this matter to a close, allowing us to further enhance the best practices, policies and procedures for prepaid cards at our Payments Transactions Services business.”

UniRush is the program manager for RushCard, a reloadable prepaid debit card cofounded by entrepreneur Russell Simmons, and oversees operations such as the cardholder website. One of Mastercard’s units, Mastercard Payment Transaction Services, is the current payment processor for RushCard.

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