In 2015, thousands of users of Russell Simmons’ prepaid debit card, RushCard, were up in arms after a computer glitch during a software update left them unable to access their money. Weeks went by before people were able to use their cards, and many complained they were left with overdue bills and even faced eviction. Soon after the card debacle, cardholders filed a class action lawsuit against Simmons, demanding compensation for the damages the computer glitch caused.
Simmons noted in an interview last year that it was one of the most devastating times in his adult life. Yeah, it’s quite devastating being a multimillionaire who doesn’t need the predatory practices of a prepaid debit card.
“This whole situation has been devastating for them, and we want to make sure they are made whole,” Simmons told the Associated Press in 2015.
To his credit, after receiving complaints on social media, Simmons did reach out to help some of those affected by the glitch with his own money.
Simmons is now selling his RushCard for $147 million to Green Dot, yet another prepaid-debit-card company.
Green Dot’s Steve Streit said that he’s buying RushCard for the name recognition (also because it has 750,000 users who don’t realize how much money they’re actually paying to access their own money).
“Having his name associated with RushCard is a big reason why we are buying it,” Streit said.
RushCard is still undergoing an investigation by the Consumer Financial Protection Bureau, but lucky for Streit, his company won’t be liable for any settlements coming from the 2015 computer glitch.
In comparing RushCard fees with Green Dot’s fees, it looks as though RushCard users will still face monthly charges if they don’t use the card, as well as an extra charge of up to $1.95 every time they make a card transaction. But in both cases, the monthly fees of $5.95-$7.95 are waived if the cardholder uses direct deposit.