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WASHINGTON The U.S. government on Wednesday
fined Mastercard Inc and UniRush $13 million for a
failure with prepaid cards that in 2015 left tens of thousands
of people unable to pay bills and access cash.
The Consumer Financial Protection Bureau (CFPB) ordered the
companies to pay $10 million in restitution to customers, with
payments of around $100 to $250 depending on the harm the
cardholders had suffered. They will pay another $3 million in
civil penalties and create a plan for preventing future
UniRush hired Mastercard to process its payments. Changing
over to Mastercard was only supposed to make the systems for
UniRush’s Rushcards unavailable for a few hours, CFPB Director
Richard Cordray said on a call with reporters. Instead problems
emerged over the course of weeks, and users were unable to
access direct deposits or benefit payments.
“Consumers could not use their own money to pay for basic
living expenses and necessities. Many racked up late fees and
other penalties,” he said, adding that “customer service efforts
failed to address problems adequately.”
Altogether, UniRush delayed processing direct deposits for
about 45,000 consumers and improperly returned other deposits,
while also wrongly suspending 1,000 accounts for suspected
fraud, according to the CFPB.
Mastercard said it is pleased to bring the matter to a close
and it will enhance its prepaid card practices.
Privately held UniRush could not be reached for a comment.
In May it agreed to pay around $20 million to settle a class
action lawsuit brought by customers affected by the outage.
On Monday leading provider of prepaid cards Green Dot Corp announced it is acquiring UniRush.
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