Russell Simmons’ RushCard fined $13 million for 2015 outage
NEW YORK — Federal regulators ordered hip-hop mogul Russell Simmons’ company RushCard to pay $13 million in fines and restitution related to a 2015 outage that cut off tens of thousands of its customers from their money.
The Consumer Financial Protection Bureau said Wednesday that it has ordered RushCard and MasterCard to pay $10 million in restitution to customers as well as a $3 million fine.
In 2015, RushCard decided to change its payment processing company to MasterCard. Typically a routine software change, the upgrade was handled improperly, resulting in a system-wide failure of RushCard’s payment processing and deposit accepting systems.
Tens of thousands of RushCard users — a significant number of them poor, minority customers without bank accounts — were suddenly cut off from their paychecks. The outage lasted for days, and, for some people, weeks. RushCard customers told stories, often through social media, about how they were unable to purchase basic necessities because all of their money was tied up in RushCard.