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Crash Strands Users of Prepaid ‘RushCard’

MANHATTAN (CN) - A computer glitch with a prepaid Visa card designed for poor and working-class families and founded by hip-hop music mogul Russell Simmons has left users locked out of their cash, according to a federal class action.

A group of five card users sued UniRush, Rush Communications, Rush Communications of NYC and Meta Financial Group on Friday.

The plaintiffs claim they are part of 75 million Americans who are either "unbanked" or "underbanked" according to the Federal Deposit Insurance Corporation.

According to its website, RushCard was established to help unbanked or underbanked people and touted its services as safe and convenient. In exchange for certain fees, users can use RushCard as a normal debit card and can load money on it at various retail locations.

On Oct. 11, 2015, the plaintiffs say RushCard sent out a notice that it would be updating its system from 3 a.m. to 8 a.m. on Oct. 12, 2015. During that time, users would not be able to access their money.

"Unfortunately, the 'temporary' loss of access to accounts lasted longer than the expected five-hour period," the complaint states. "The system remained down, with customers locked out, for many days. Several customers still have not regained access."

The plaintiffs claim the glitch caused them "immense hardship, including the inability to pay for basic necessities such as food, rent, electricity and gas. Additionally, customers were unable to pay their household bills, resulting in late fees being accessed."

The plaintiffs say card users who have regained access to their accounts have found discrepancies in their account balances, including some balances being completely wiped out, and found they were charged balance inquiry fees for failed ATM withdrawal attempts during the time the RushCard system was down.

The class consists of all RushCard users who were denied access to their accounts beginning Oct. 12, 2015.

The class seeks damages for negligence, fraud and misrepresentation, unjust enrichment, breach of contract, conversion and breach of fiduciary duty. The class is represented by Domenico Minerva of Morgan & Morgan.

"While RushCard cannot comment on the specifics of ongoing litigation, we intend to vigorously defend ourselves," RushCard said in a statement.

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