Russell Simmons Talks RushCard Shutdown and Multi-Million Dollar Fund to Help Customers Cover Costs
Last month, RushCard, a prepaid debit card founded by Russell Simmons, and marketed to low-income customers who don’t have regular bank access was under scrutiny. On Oct. 14, several RushCard users took to social media to express their frustrations that they couldn’t access funds such as paychecks, government benefits, and electronic transfers in their RushCard accounts. It caused a ripe effect among thousands of users who needed to pay for bills, but couldn’t because the outages went on for several weeks and didn’t get back online until recently.
This all occurred when the company switched from an old transaction processor to a new one. Since the debacle, Simmons has apologized several times and vowed to make things right again though a “multimillion dollar fund” to help customers cover any costs they accumulated during the card’s technical problems. He’s also promised RushCard fees will be waived from November 1, 2015 to February 29, 2016.
Despite his efforts, Simmons’ RushCard is being investigated by The Consumer Financial Protection Bureau. They are “prepared to use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve,” according to a statement by Consumer Financial Protection Bureau Director Richard Cordray to Rolling Stone. The CFPB was already in talks with regulators at 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.”
All of this brings us to Simmons’ latest interview about the matter with HipHopDX. The online publication took a deep-dive into the issues, addressing the damages of RushCard to its users, his multi-million fund, if he’s exploiting the black community, the CFPB’s investigation, and what’s next. Here’s a condensed version below, but head over here to read the entire thing in full.
Russell Simmons: We know that this was a very big thing. When transferring processors, we had a crash. That crash set off a tsunami, so a lot of things happened as a result of it. We had hundreds of people working on it and it’s just now over the last two weeks back to normal as far as the services we offer. Every single person gets their direct deposit two days early. A lot of the services we had—the card-to-card transfer—all of these things are back in order. Now I have the rebuilding process to restore trust from the community and paying back people who were damaged.
I’ve announced that we’re creating a multimillion dollar fund that will be used just to pay people who didn’t get their money. We’ve given some people money just for the outage. But then the people who make additional claims because they lost their apartment or because they lost their job or because they couldn’t get their medicine—there will be claims from people that were damaged. We’re putting a fund together that will help to make people whole. That’s our job. That’s one of the many things we have to do to regain trust.
My answer as far as exploiting the black community, I’ve never exploited any community. When I see these guys at the march or when I see these guys changing laws, when I see these critics showing up with me and the community doing things, then I can respect their criticism. I respect everyone, but I’m not in the business of exploiting nobody. If you look at the Consumer’s Union, you can’t buy them. The Consumer’s Union is the biggest and most powerful of all. They cannot be bought. There’s no advertisers, no nothing. I have their gold star. I was among their top three.
The idea that people want to investigate me is fine by me. Sometimes it will take a lot of the legal team and a lot of the people whose job it is to make sure we’re building other stuff, so I’m trying to respond to them as quickly as possible. I want them to reveal what they learned in any investigation. I welcome it. I’m the first person who wants to investigate corporations. Remember, I’m an Occupy Wall Street guy. I was at Occupy Wall Street everyday. I don’t think companies should be allowed to operate without being investigated or without having small margins or reasonable margins or without exploiting the people. That’s been my whole life’s work. It’s not like I have a history supporting the prison industrial complex. I try to dismantle it. I don’t invest in things that exploit the people. I try to dismantle things. I didn’t occupy Wall Street to try to destroy Goldman Sachs.
We make very little per customer. Margins average about 10% with ups and downs over the years. When we give away this free service, it’ll be more than anything we’ve ever made in a given year. Here’s how small of a margin that is, Chase Manhattan got into our business and they gave away 25,000 free ATMs. We matched them by giving away 25,000 free ATMs in the hood. Guess what happened. They looked at that shit and they quit. They got out of the business.
What happened [with the outage], I don’t even know how to apologize to a lot of the people who didn’t get their money for days at a time. For the majority of the people it was only a few days, but even a few days is forever. I understand because I spoke to enough people, even if people don’t believe it. I spent a lot of time in the community. I spoke with a lot of people. I have family members that use the card. I have lots of connections in my communities around this country. I know how devastating it was to some people. I’m deeply sorry. I don’t know what else to do about it but try to make good on it and try to make the people that were damaged whole. That’s all I can do.
Russell Simmons Talks RushCard Shutdown and Multi-Million Dollar Fund to Help Customers Cover Costs
complex music
Russell Simmons Talks RushCard Shutdown and Multi-Million Dollar Fund to Help Customers Cover Costs
Source: complex music
