Russell Simmons was fed up with the fees. The hip-hop personality was concerned that poor Americans without bank accounts were paying too many of them — fees to cash checks, fees to use an ATM, fees for money orders and more.
Simmons said he founded RushCard in 2003 with the goal of reducing the cost of poverty for those who live in it. RushCard was one of the first plastic prepaid cards — a new financial product like a debit card, but without the checkbook.
“For years I heard from mothers, children in tow, waiting in lines for their paychecks, then in more lines to expensively cash those paychecks, then in even more lines to pay their bills,” Simmons would later write. “Truth be told, these Americans couldn’t afford the ‘minimum deposit levels’ required by large banks to avoid monthly account maintenance fees.”
This month, though, some RushCard customers have not been able to access their money for nearly two weeks due to what appears to be a technical malfunction. Paychecks deposited directly onto the cards simply vanished. The economically vulnerable people Simmons had sought to help were suddenly left in a precarious spot.
It is unclear how many people were affected and whether the problem is completely resolved. Simmons’s company said in a statement last week that it still couldn’t provide current balances for “a handful” of customers, and that the company was working with them individually to correct the remaining errors.
“This has always been my mission,” Simmons said in the statement, “to financially empower those families that have been shut out of the economic mainstream.”
The disruption has exposed prepaid cards to more criticism from advocates for consumers who see the products that Simmons helped introduce as sleazy and disreputable.
Click here to read more about how the RushCard short coming is affecting families it was original set up to help.
