Russell Simmons said this weekend that technical issues plaguing his pre-paid debit cards – called RushCard – have been resolved. But the news didn’t come soon enough to stop a federal investigation and class action lawsuit.
The hip-hop mogul and co-owner of the RushCard reassured his users that they would have access to their money. “Card to card transfers are working,” Simmons tweeted Sunday morning. Thousands had been prevented from accessing their money and raised their concerns on social media.
Founded by Simmons in 2003, the RushCard is a pre-paid Visa Debit Card mostly used by “poor and working class Americans who cannot or choose not to establish traditional banking accounts,” according to a class action lawsuit filed Friday against Simmons’ UniRush Financial, Rush Communications, Meta Financial Group and MetaBank in US District Court in New York.
The RushCard allows users to have their paychecks or government checks directly deposited onto the cards or they can load money on the cards themselves and use them to make payments, buy groceries and withdraw cash from ATMs.
But earlier this month, the cards stopped working for some users who flooded social media with complaints. The affected cardholders said they were blocked from using their accounts. Others complained that their accounts had been deactivated or that money was missing and they couldn’t pay bills, buy food or put gas in their cars.
Simmons blamed the problems on a technology update. On Oct. 12, he wrote on the RushCard Facebook page: “Many of you were affected by our scheduled maintenance by our technology partner. I want to apologize for the inconvenience and frustration this disruption caused you. My team at RushCard is working to make sure you have the best access and service possible, and I thank you for your loyalty.”
Unfortunately, the problems continued.
On Oct. 21, another lengthy message was posted to the RushCard Facebook page and later on Twitter saying they were still trying to iron out the problems: “Last week, some customer’s direct deposits were returned to your payroll or government benefits administrator as a result of inaccurate account information. We have put in new processes to review all incoming deposits beginning this week to ensure deposits are posted in a timely manner.”
By then, five cardholders said they’d had enough and filed the class action lawsuit.
The suit states that on or about Oct. 11, “some RushCard customers received notice, by text message, that RushCard would be updating its system” for five hours and customers would be unable to access their accounts.
However, the suit says the problems continued for nearly two weeks “with customers locked out” and many “still have not regained access.”
The plaintiffs are seeking “damages and injunctive relief based upon the unlawful conduct of Defendants in denying such account holders the ability to obtain funds in their accounts and in misappropriating funds held in the RushCard accounts.”
On the same day that the lawsuit was filed, the Consumer Financial Protection Bureau announced it was launching an investigation.
“The CFPB is taking direct action to get to the bottom of this situation that may have harmed thousands of innocent consumers already,” Director Richard Cordray said in a statement. “The CFPB has also engaged in discussions with fellow regulators, including the Office of the Comptroller of the Currency and the Federal Trade Commission, to ensure a comprehensive response that addresses the situation quickly and holds accountable all of the parties involved to make consumers whole.”
Despite the federal inquiry, Simmons said RushCard backers did nothing wrong.
“Honestly excited to see investigations beginning they will expose our operation as squeaky clean,” he tweeted Saturday morning.
TheWrap was scheduled to interview the music mogul on Saturday, Oct. 24, in Santa Monica where he was slated to host an art competition, however he was a no show. “Russell’s team informed us 20 minutes ago that he had something come up and he would not be able to attend,” a spokesperson said at the event.
Pamela Chelin contributed to this report
Hollywood's Most Outrageous Lawsuits (Photos)
Between Lindsay Lohan firing back at Fox News, Mariah Carey allegedly short changing her domestic help, and Sly Stone winning millions after suing his ex-manager -- stars often turn to the courts to address their squabbles and strife.
Lindsay Lohan filed suit against Fox News and Sean Hannity on Feb. 2, 2015, after a news correspondent accused Lohan's mom of snorting cocaine with her troubled daughter. It didn't take long for Fox to fire back. “We will defend this case to the fullest,” the network told TheWrap the next day.
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A former nanny for Mariah Carey and Nick Cannon filed a lawsuit on Jan. 28, 2015, alleging she was fired after showing the couple's kids too much affection and did not receive overtime pay despite working 100 hours per week.
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Legendary funk artist Sly Stone won $5 million on Jan. 27, 2015, after suing his former manager and entertainment attorney for misappropriating royalties owed him for more than 20 years.
Former “Real Housewives of Orange County” executive producers Patrick Moses and Kevin Kaufman filed a suit against Bravo in Nov. 2014, claiming they were deceitfully ousted from the show and bilked out of millions of dollars after helping to create the show and the franchise.
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Jessie Nizewitz, a contestant on VH1’s “Dating Naked,” filed suit in New York in Aug. 2014, seeking $10 million in damages for emotional distress, humiliation and embarrassment after the show allegedly failed to properly blur her genitals.
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Octavia Spencer was awarded $940,000 in Dec. 2014 after claiming a weight loss company, Sensa Products Inc., wrongfully fired her from an endorsement deal and still owed her money.
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Former Tinder executive Whitney Wolfe filed a sexual harassment lawsuit against her former company June 2014, alleging she was repeatedly called a "whore" by CMO Justin Mateen and was stripped of her co-founder title simply for being a woman.
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Former TMZ producer Jarrett Gaeta slapped his former employer with a lawsuit in June 2014, claiming he was wrongly terminated. Gaeta was let go after a subordinate accused him of "racist behavior," including defending blackface and sending pictures of watermelons to African-American employees.
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CNN America was sued in Aug. 2014 by a pair of plaintiffs who claim that correspondent Arwa Damon bit one of them and threatened both during a drunken altercation at the U.S. Embassy in Baghdad.
"Boardwalk Empire" actress Paz de la Huerta sued Lionsgate in Aug. 2014 claiming she was run over by an ambulance while filming "Nurse 3D." Lionsgate filed a motion to dismiss, which De La Huerta opposed on Jan. 23, 2015. Lionsgate then opposed her opposition on Jan. 30, 2015, in a seemingly neverending loop of opposing motions.
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Rapper Rakim Mayers, aka A$AP Rocky, was sued in civil court in June 2014 for allegedly assaulting a woman while making his way through a crowd during the 2013 Made in America Festival.
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Nicki Minaj’s former hairstylist and wig designer filed a $30 million lawsuit against the rapper in 2014 for allegedly stealing his wig designs and costing him a potential reality show. A judge later dismissed the case for lack of sufficient evidence.
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Kim Kardashian and Kanye West filed suit against YouTube founder Chad Hurley on Oct. 31, 2013, claiming he posted a video of the couple’s surprise engagement to his website without permission. The process was delayed when Hurley’s reps filed an anti-SLAPP motion in an attempt to have the case dismissed.
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Jahmel Binion filed a lawsuit against Shaquille O’Neal in July 2014 when O’Neal posted a photo to his Instagram account mocking Binion, who suffers from a rare condition that causes facial abnormalities, sparse hair and missing teeth. Binion claimed defamation, emotional distress and invasion of privacy in the $25,000 lawsuit, and after pressure from the public O’Neal apologized.
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In 2014 singer Chris Brown was mentioned in a lawsuit filed by the cousin of artist Frank Ocean. The defendant claimed Brown and an associate allegedly kicked and punched him when he confronted them about parking in a spot designated for Ocean at a Los Angeles recording studio. Ocean, who was also injured, later said he wouldn't seek criminal or civil penalties.
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From embezzlement to slander, there’s no shortage of celebrity court action
Between Lindsay Lohan firing back at Fox News, Mariah Carey allegedly short changing her domestic help, and Sly Stone winning millions after suing his ex-manager -- stars often turn to the courts to address their squabbles and strife.