RushCard Class Action Accuses Pre-Paid Visa Card Sellers of Fraud

The sellers of the RushCard pre-paid Visa card have been hit with a class action lawsuit accusing them of defrauding cardholders.

Plaintiff Calvin Smith filed the RushCard class action lawsuit earlier this month against defendants UniRush LLC d/b/a UniRush Financial Services, Rush Communications LLS, Rush Communications of NYC Inc., Meta Financial Group Inc. and MetaBank.

According to the RushCard class action lawsuit, the defendants engage in unlawful conduct such as denying RushCard accountholders access to the funds in their accounts and misappropriating the funds held in the RushCard accounts.

Smith claims that this conduct by the UniRush defendants has prevented consumers with RushCards from accessing their own money in order to purchase basic necessities such as food, clothing and shelter. Smith further alleges that the defendants have converted cardholders’ money for their own use and have imposed unlawful fees and charges on consumers.

The RushCard class action lawsuit asserts that UniRush began offering the RushCard to U.S. consumers in January 2003, claiming that the RushCard would provide financial services to consumers who did not have access to traditional banking services such as checking accounts and debit cards.

The RushCard purportedly offered consumers the same benefits as debit cards, and could be used to draw money from their accounts through ATMs. Consumers could also have their paychecks deposited directly to their RushCard accounts, and their funds would allegedly be available to the account holder two days earlier than if the direct deposit was made to a traditional bank account.

In October 2015, some RushCard users reportedly received a text message notifying them that the RushCard system would be undergoing a system update from 3 a.m. to 8 a.m. ET on Oct. 12, 2015. According to the RushCard class action lawsuit, users were informed that they would not be able to access their accounts during this period.

The five-hour system upgrade reportedly did not go as planned and, according to the RushCard class action lawsuit, consumers were locked out of their accounts for several days.

Calvin asserts that he requested a new RushCard, but it took more than two months to receive his new card. He says he didn’t have access to the funds that were in his account during this time. When he finally received his new card, he was allegedly unable to activate the card even after speaking with a supervisor.

“For over three months, Plaintiff was unable to access the funds in his account, and was unable to pay his household bills that he needed to support his family,” Calvin alleges in the RushCard class action lawsuit. He claims he was routinely denied access to his funds and that he was damaged by the defendants’ false representations about the RushCard.

Calvin filed the RushCard class action lawsuit on behalf of himself and other consumers in the state of California who were allegedly “fraudulently induced into purchasing RushCards and depositing money into their RushCard accounts because they were led to believe their funds would be ‘safe and protected’ with unhindered access to these monies.”

The RushCard class action lawsuit asserts that the defendants violated the California False Advertising Act and the Unfair Business Practices Act and brings claims for negligence, fraud and misrepresentation, unjust enrichment, breach of contract, conversion, and breach of fiduciary duty.

Smith is represented by Todd M. Friedman, Meghan E. George and Adrian R. Bacon of the Law Offices of Todd M. Friedman PC.

The RushCard Class Action Lawsuit is Calvin Smith v. UniRush LLC d/b/a UniRush Financial Services, et al., Case No. 2:16-cv-02533-SVW-E, in the U.S. District Court for the Central District of California.