On February 1, the Consumer Financial Protection Bureau ordered payment card companies MasterCard and UniRush to pay $10 million in restitution and a $3 million fine related to service breakdowns that left customers unable to access their funds. “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. “The companies must set things right for consumers and make sure such devastating service disruptions are not repeated.”
UniRush is the program manager for RushCard, a reloadable prepaid debit card, which many consumers use for government benefits or payroll deposits. In 2014, UniRush decided to switch payment processors to MasterCard, and the parties spent thirteen months preparing for the service transfer. The switch occurred in mid-October 2015, when RushCard had approximately 650,000 active users. However, there were a number of problems associated with the transfer and, as a result, many customers could not use their cards to receive paychecks and other direct deposits, withdraw cash, make purchases, pay bills, or get accurate account information.
According to the Bureau, MasterCard and UniRush denied consumers access to their funds because UniRush did not accurately transfer all of its accounts to MasterCard. Furthermore, the Bureau claims that UniRush delayed processing customers’ direct deposits during the service transfer or failed to process their deposits at all. The consent order also alleges that the company double posted deposits, which falsely inflated customers’ account balances and led some customers to overdraw their accounts. The Bureau claims that UniRush compounded the problem by failing to provide customer service to many customers who sought help from the company. The Bureau recorded 830 complaints from RushCard customers regarding the service transfer. By comparison, the CFPB received 147 complaints about prepaid cards in general from November 2014 to January 2015.
In addition to having to pay the ordered restitution and fine, the two companies must devise a plan to prevent future service disruptions. The Bureau plans to monitor the companies’ compliance with the consent order.