Last month, RushCard, a prepaid debit card founded by Russell Simmons, and marketed to low-income customers who donāt have regular bank access was under scrutiny. On Oct. 14, several RushCard users took to social media to express their frustrations that they couldnāt 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 couldnāt because the outages went on for several weeks and didnāt 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 āmulti-million dollar fundā to help customers cover any costs they accumulated during the cardās technical problems. Ā Heās also promised RushCard fees will be waived from November 1, 2015 to February 29, 2016.
Despite his efforts, Simmonsā RushCard is being investigated by The Consumer Financial Protection Bureau. They are āprepared to use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve,ā according to a statement by Consumer Financial Protection Bureau Director Richard Cordray to Rolling Stone. The CFPB was already in talks with regulators at theĀ 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."
Ā All of this brings us to Simmonsā 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 heās exploiting the black community, the CFPBās investigation, and whatās 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 itās 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 hadāthe card-to-card transferāall 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.
Iāve announced that weāre creating a multimillion dollar fund that will be used just to pay people who didnāt get their money. Weāve 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 couldnāt get their medicineāthere will be claims from people that were damaged. Weāre putting a fund together that will help to make people whole. Thatās our job. Thatās one of the many things we have to do to regain trust.
My answer as far as exploiting the black community, Iāve 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 Iām not in the business of exploiting nobody. If you look at the Consumerās Union, you canāt buy them. TheĀ Consumerās UnionĀ is the biggest and most powerful of all. They cannot be bought. Thereās no advertisers, no nothing. I have their gold star. I was among their top three.Ā
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 weāre building other stuff, so Iām trying to respond to them as quickly as possible. I want them to reveal what they learned in any investigation. I welcome it. Iām the first person who wants to investigate corporations. Remember, Iām anĀ Occupy Wall StreetĀ guy. I was at Occupy Wall Street everyday. I donāt think companies should be allowed to operate without being investigated or without having small margins or reasonable margins or without exploiting the people. Thatās been my whole lifeās work. Itās not like I have a history supporting the prison industrial complex. I try to dismantle it. I donāt invest in things that exploit the people. I try to dismantle things. I didnāt occupy Wall Street to try to destroy Goldman Sachs.Ā
We make very little per customer. Margins average about 10% with ups and downs over the years. When we give away this free service, itāll be more than anything weāve ever made in a given year. Hereās 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.Ā
What happened [with the outage], I donāt even know how to apologize to a lot of the people who didnāt 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 donāt 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. Iām deeply sorry. I donāt know what else to do about it but try to make good on it and try to make the people that were damaged whole. Thatās all I can do.