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CFPB Orders Mastercard, UniRush to Pay $13M for RushCard Breakdowns Denying Consumer Access to Funds
Thursday, February 2, 2017 6:40 AM

The Consumer Financial Protection Bureau on Wednesday took action against Mastercard and UniRush for breakdowns that left tens of thousands of economically vulnerable RushCard users unable to access their own money to pay for basic necessities.

In October 2015, a rash of preventable failures by UniRush and Mastercard, its payment processor, 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. 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 tens of thousands of harmed customers. The CFPB also fined Mastercard and UniRush $3 million.

The bureau reported that in 2014, UniRush named Mastercard as its payment processor. Mastercard and UniRush spent 13 months preparing to switch to Mastercard’s processing platform, which ultimately took place Oct. 10-12, 2015. At the time of the switch, RushCard had about 650,000 active users, of which about 270,000 received direct deposits on their RushCard.

The CFPB said Mastercard and UniRush’s actions before, during, and after the changeover harmed tens of thousands of consumers. The bureau received about 830 consumer complaints from RushCard users in the weeks that followed the switch in payment processors. By comparison, the CFPB received 147 complaints about prepaid cards from November 2014 to January 2015.

As a result of its preventable failures, the CFPB found that Mastercard or UniRush:

  • Denied consumers access to their own money.
  • Botched the processing of deposits and payments.
  • Gave consumers inaccurate account information.
  • Failed to provide customer service to consumers impacted by the breakdowns.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws. Under the terms of the consent orders, Mastercard and UniRush must:

  • Pay an estimated $10 million in restitution to tens of thousands of harmed consumers.
  • Draw up a plan to prevent future problems.
  • Pay a $3 million civil penalty to the CFPB Civil Penalty Fund.

Read the consent order against Mastercard and UniRush.

For more detailed information about this CFPB action, please visit the CFPB Newroom