Mastercard and UniRush pay $13M for botched conversion
The Consumer Financial Protection Bureau has announced it has issued a Consent Order to UniRush LLC (headquartered in Ohio) and Mastercard International Incorporated (Purchase, New York), in connection with a botched conversion of UniRush's RushCard prepaid card accounts to the Mastercard processing platform that affected tens of thousands of consumers.
RushCard is a reloadable prepaid debit card. UniRush LLC is the program manager for RushCard and oversees operations such as the cardholder website. One of Mastercard International's units, Mastercard Payment Transaction Services, is the current payment processor for RushCard. After more than a year of preparation, processing for RushCard accounts, which include accounts that receive government benefits or payroll funds, was switched to Mastercard's platform in mid-October, 2015. At the time, there were about 650,000 active users, about 270,000 of whom received direct deposits to their card accounts. "The CFPB received about 830 consumer complaints from RushCard users in the weeks that followed the switch in payment processors. By comparison, the CFPB received 147 complaints about prepaid cards from November 2014 to January 2015."
As a result of its preventable failures, the CFPB found that Mastercard or UniRush:
- Denied consumers access to their own money: UniRush did not accurately transfer all accounts to Mastercard. As a result, thousands of consumers could not access funds stored on their cards for days, or in some circumstances, weeks. Because of Mastercard’s actions, accounts of about 1,110 consumers were incorrectly suspended. UniRush also delayed crediting cash deposits to consumers’ accounts and shut off access to certain funds that consumers put aside for savings. UniRush did not issue a working replacement card to consumers whose cards were lost or stolen during this period.
- Botched the processing of deposits and payments: UniRush delayed processing direct deposits for more than 45,000 consumers, and did not process or improperly returned deposits of 2,000 others. As a result, consumers could not access their paychecks or government benefits. UniRush also erroneously double posted deposits and did not promptly process electronic debit transactions, which falsely inflated those RushCard holders’ account balances. As a result, thousands of consumers accidentally spent more money than was loaded on their RushCard. With no advance notice to consumers, UniRush used funds consumers subsequently loaded onto their RushCards to offset negative balances caused by its processing errors.
- Gave consumers inaccurate account information: Mastercard did not make sure it was sending accurate information about consumers’ account balances to UniRush when it declined to authorize certain transactions. As a result, some consumers received incorrect information telling them their account balances were zero, when the consumers actually had funds stored on their cards.
- Failed to provide customer service to consumers impacted by the breakdowns: UniRush did not have an adequate plan to step up its customer service response to meet the increased demand caused by service disruptions. Even after hiring additional personnel, UniRush failed to train customer service agents in time to meet the surge in demand. As a result, some consumers who called customer service waited on hold for hours and could not obtain critical information about the status of their funds and accounts.
Mastercard and UniRush were ordered to (1) pay an estimated $10 million in restitution to harmed consumers; (2) draw up a plan to prevent future problems; and (3) pay a $3 million civil penalty.