Shannen Crews is waiting for her paycheck. Normally, it's posted to her prepaid Rush debit card on Tuesdays at 8 a.m. This morning, she woke up to find no new deposits. Her husband's paycheck usually posts to his card on Tuesday evenings. She isn't optimistic it will come through, either.
Crews and her husband, who live in Palatka, Florida, are two of the many RushCard customers who couldn't access their money at some point over the last eight days. The trouble started on Oct. 12, when RushCard's website and mobile app were supposed to go down for five hours of scheduled maintenance.
Ever since, RushCard's Facebook page has been inundated with complaints about cards that have been inactivated, direct deposits that haven't posted and balances that read $0 when there should be money on the card.
The situation has grown so bad that the man who created and markets the card, hip-hop mogul Russell Simmons, has taken to sending angry customers direct messages on Twitter in an attempt to help. (It is unclear if that's helped.)
But because of the mandatory arbitration clause in the cardholder agreement, which also bans class-action lawsuits, customers are limited in their ability to fight back.
Prepaid debit cards have become popular in the last decade, particularly with those who either cannot obtain or do not want a traditional bank account. Paychecks can be deposited directly to the cards, and they can be used at any merchant that accepts credit cards. They don't require a credit check to open, and users can spend only what's on the card so there's no risk of surprise overdraft fees. On the other hand, prepaid cards often charge hefty monthly or per-transaction fees.
The user base for prepaid cards tends to be the most financially vulnerable among America's poor and working classes. People who use prepaid cards often live paycheck to paycheck.
"We have no money for gas to get back and forth to work, I can't go grocery shopping because my money is not in. I have to pay my son's day care (which is a bust because I have no money)," Crews told The Huffington Post.
Crews and her husband had chosen RushCard because of its early payday feature.
When a company pays people by direct deposit, it generally sends the necessary information to its employees' banks a couple of days early. (The money on prepaid cards still moves through the banking system, even though the card is not tied to an individual's bank account.) Most banks hold on to that information while the paychecks are still technically pending. On payday, the money shows up in employees' accounts.
But with RushCard, the paycheck shows up on the card when the bank gets the information from the payroll department, but before the paycheck has officially cleared. (This option is available on a few other prepaid and bank cards as well.) Essentially, users are getting a two-day loan from RushCard, in exchange for which they pay fees.
RushCard offers two options: either a monthly payment of $5.95 to $7.95 for using the card, or a $1 per-transaction fee charged the first 10 times the card is used every month. There are also fees for using out-of-network ATMs, fees for checking your balance and a one-time fee when you sign up for the card.
What customers might not realize is that because RushCard's early paycheck feature is basically a loan, they aren't necessarily entitled to the money until payday. If they don't get their paycheck two days in advance, they don't have much recourse.
At this point, RushCard customer Danielle Bowlings, of Pensacola, Florida, would probably be happy if she'd had to wait only two days to access her paycheck. The money was supposed to be on her card last Monday. It's now been eight days, and she still can't access the direct deposit that her employer insisted went out last week. After more than two hours on the phone Saturday with RushCard's customer service, the representative hung up on her, she said. Bowlings was one of the customers to receive a personal tweet from Russell Simmons, although he didn't actually take any action to help her.
Direct messages from famous people may still be nice. But Bowlings' son turned 16 last week. While her family helped pay for the celebration, she wasn't able to take him to the Department of Motor Vehicles to get his license because she didn't have the money to pay the fee.
Finally, on Tuesday afternoon, she learned from her employer that the direct deposit didn't go through and that she'll have to request a paper paycheck -- which will take several more days to be mailed from Atlanta.
"I'm pretty sure when I get home from work today, I'll have an eviction notice on the door because my rent is due on the 15th," Bowlings said.
RushCard did not return The Huffington Post's request for comment. The CEO released a statement to BuzzFeed on Monday, which said the systems were running again. However, it also said that "a small number of accounts are still in an inactive state. We have set up command centers in NYC and Cincinnati to begin outreach to those who remain affected."
A brief search through those talking about RushCard on both Twitter and Facebook found no users who say their RushCard accounts are active again.
In other circumstances, customers might turn to litigation. In this case, that's likely a non-starter.
The RushCard agreement has a mandatory arbitration clause (yes, in caps):
ARBITRATION OF YOUR CLAIM IS MANDATORY AND BINDING. NEITHER PARTY WILL HAVE THE RIGHT TO LITIGATE THAT CLAIM THROUGH A COURT. IN ARBITRATION, NEITHER PARTY WILL HAVE THE RIGHT TO A JURY TRIAL OR TO ENGAGE IN DISCOVERY, EXCEPT AS PROVIDED FOR IN THE AAA CODE OF PROCEDURE.
It goes on:
NO CLASS ACTION, OR OTHER REPRESENTATIVE ACTION OR PRIVATE ATTORNEY GENERAL ACTION OR JOINDER OR CONSOLIDATION OF ANY CLAIM WITH A CLAIM OF ANOTHER PERSON OR CLASS OF CLAIMANTS SHALL BE ALLOWABLE.
Such mandatory arbitration clauses, which were upheld by the Supreme Court in 2012, are common in the credit card and consumer goods industries. Business advocates argue that they cut down on the time and money lost to lawsuits. Consumer groups generally contend that individual customers, like those who have had their money tied up for days because of RushCard's technical mistake, should have the right to sue a company. Arbitration is proven to favor big business more than lawsuits.
The Consumer Financial Protection Bureau announced last week that it is proposing to ban these sort of agreements. But any such change is likely to come too late to help RushCard's customers.
"It is outrageous that consumers have not had access to their money for more than a week," said Gail Hillebrand, associate director of consumer education and engagement at the CFPB. "We are looking into this very troubling issue."
In the meantime, she had some advice for RushCard users: "Customers who are still affected by this situation should consider stopping their direct deposit, so that they can get their next paycheck by check or have it deposited in another account. Consumers can also ask anyone who has charged them a late fee on a payment affected by this delay to waive that fee."
All people using prepaid cards, Hillebrand said, "should watch the transactions on their accounts, and report any problem promptly to the prepaid card issuer. The Bureau accepts consumer complaints at consumerfinance.gov or by phone toll-free at 855-411-2372."
The story has been updated with comment from the Consumer Financial Protection Bureau.