RushCard says it will compensate card holders for losses during weeks-long outage
The Unhived Mind
RushCard says it will compensate card holders for losses during weeks-long outage
By Nick Statt on October 30, 2015 06:07 pm Email @nickstatt
http://www.theverge.com/2015/10/30/9646864/rushcard-outage-russell-simmons-compensate-card-holders-losses
RushCard, the pre-paid debit card company owned by hip-hop mogul Russell Simmons, said yesterday that it would compensate the tens of thousands of customers whose cards were inaccessible during a two-week-long outage. The issue first began on October 12th when the company tried to switch to a payment system with MasterCard and ran into a technical malfunction. RushCard executives say the issue was resolved last week, but some users may still be unable to withdraw cash or use their card to pay bills.
The company previously said it would waive fees, like maintenance and transaction fees and ATM charges, for four months starting in November, but this new compensation effort goes one step further. Simmons said he has been compensating customers out of his own pocket, but that an official RushCard fund is now being set up to reimburse those who suffered losses in the form of late fees and other financial hardships imposed by the malfunction. “This whole situation has been devastating for them, and we want to make sure they are made whole,” Simmons said yesterday in an interview with the Associated Press.
“WE WANT TO MAKE SURE THEY ARE MADE WHOLE.”
The ordeal has led to increased scrutiny of the prepaid debit card market. RushCard, founded more than a decade ago, was one of the first companies to provide pre-paid debit cards to those without easy access to a bank account. Yet these products operate without the same consumer protections as standard debit and credit cards. Now, the Consumer Financial Protection Bureau, the Federal Trade Commission, and the US Treasury Department are all looking into ways to impose stricter regulations and increase oversight.
theunhivedmind
This is a perfect example of why a cashless society is very dangerous especially during disasters. Please remember it’s no good owning a debit card to your bank account during a disaster because you still have no cash. Always keep a survival amount of cash at hand because all e-commerce systems will become useless during serious disasters or power outages. For cards to be of some use during a disaster you’d have to make sure all commerce centres had a backup plan based on the old credit card model. What used to happen was a credit card was passed over and the cashier would place it in a small press like device then a carbon copied paper was placed on the top, they’d roll the device across the card and paper and imprint the data on two-three copies then the customer would sign for the transaction. When using the manual old systems as described you’re no longer guaranteed payment in the normal time-frame because there’s no real-time acceptance of the transaction. This is the only way I can see cashless having some action during disaster but without the old model rollers in the hands of store owners then you have no chance of survival without cash.
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