All Articles Tagged "rush card"
Russell Simmons' Rush Card Under Investigation For Hidden Fees
By Alexis Garrett Stodghill
The Florida Attorney General’s Office has named a Russell Simmons company as one of five financial firms selected for investigation into criminal activity. Unirush Financial Services, maker of the RushCard pre-paid debit card, has been subpoenaed along with First Data Corporation, Green Dot Corporation, Account Now, Inc., and Netspend Corporation for making fraudulent claims and charging hidden fees.
The RushCard bills itself as a product that will help people manage banking costs better than others, but its payment structure can make the RushCard more expensive than similar debit cards offered at a flat rate. At $1-2 per ATM transaction, using the RushCard can cost much more than the $16 a year the company represents, according to EUR Web. The financial organization also promises to help improve users’ credit ratings, a point under major dispute.
Possibly misleading its customers into believing that the RushCard builds credit and provides savings are two crimes that should be severely punished, if the Florida Attorney General’s Office is able to make its case. Russell Simmons has responded to these allegations by assuring the public that he welcomes the investigation. Simmons hopes it can incite a wider debate on improving the variety of financial instruments that are offered. In support of his RushCard, Simmons stated:
“As a leader in this industry, I encourage a full understanding of RushCard’s transparent pricing, and valuable services, especially for those who have been turned away or let down by traditional banks. Third party research has shown that for many customers, the best prepaid card services offer significant savings compared to what they would pay in traditional bank checking accounts, with savings of up to 50%, as documented by third party research from the nation’s second largest bank by assets, JP Morgan and Company.
“RushCard is the solution for people who want affordable financial services that they can customize to suit their needs. As I look at the payments landscape, I see the banks as the large record chains and my RushCard is looking a lot more like iTunes. I welcome the public debate because the more educated the consumers are the more successful we become.”
Simmons has been an outspoken advocate for promoting pre-paid debit card usage over other banking methods. He claims that he wants to help the black community by providing options that save time and money. Yet, the argument that the RushCard is cheaper than traditional banking is a stretch. The card does provide convenience in a world that requires a piece of plastic to make transactions, but its fees accrue quickly as you’re charged to spend your own money. Seems like a bad deal. The RushCard might be cheaper than the check cashing places Simmons is trying to steer people away from, but is certainly not the optimal way of managing funds. As a masterful businessman, Simmons must know this.
The RushCard does fill a niche between true financial empowerment and the worst elements of the money management business — which check cashing firms represent. But why give the black community an option that is only two steps above the worst? Russell Simmons recognized an opportunity to create an empowering system for helping the financially undeserved. Instead he has provided another sub-optimal vehicle targeted towards an urban audience that needs financial education to build its confidence.
The RushCard is a mediocre tool that exploits fear-based ignorance. While Unirush Financial Services might not be conducting business in a way that is technically illegal, promoting the RushCard as a means of sound money management reeks of the unethical.
A Look at Russell Simmons’ Prepaid RushCard
(AP) — Celebrities endorsing financial services can be a touchy subject. But hip-hop mogul Russell Simmons says he introduced his prepaid RushCard in 2003 to serve those locked out of banking services. On Tuesday, syndicated radio host Tom Joyner ventured into the prepaid market as well with his Reach card. Joyner says the card will resonate with his predominantly African American listeners, who are more likely to avoid traditional bank accounts. Prepaid cards in general have been criticized for the fees they charge. The industry is still relatively young and there’s great variance in the fees users will encounter.
How Russell Simmons Out-Lobbied Big Banks
(Business Week) – It was surely the only time that lawmakers hammering out the financial regulation bill were lobbied by a man wearing a hoodie and New York Yankees baseball hat. That’s how Russell Simmons showed up on Capitol Hill earlier this month to fight a proposal to cap the fees retailers pay banks to process debit-card payments. Simmons, best known for his Phat Farm clothing line and Def Jam music label, is also the owner of UniRush, a Cincinnati company that sells a prepaid Visa (V) debit card called RushCard, with about 2.5 million users. Simmons has persuaded lawmakers to exempt his business from a measure that would shift more of the cost of debit-card processing from retailers to the banks.
How Russell Simmons Out-Lobbied Big Banks
(Business Week) – It was surely the only time that lawmakers hammering out the financial regulation bill were lobbied by a man wearing a hoodie and New York Yankees baseball hat. That’s how Russell Simmons showed up on Capitol Hill earlier this month to fight a proposal to cap the fees retailers pay banks to process debit-card payments. Simmons, best known for his Phat Farm clothing line and Def Jam music label, is also the owner of UniRush, a Cincinnati company that sells a prepaid Visa (V) debit card called RushCard, with about 2.5 million users. Simmons has persuaded lawmakers to exempt his business from a measure that would shift more of the cost of debit-card processing from retailers to the banks.
Rap Impresario Simmons Wins Exemption on Debit-Card Fee
(Bloomberg) — It was surely the only time that lawmakers hammering out the financial-regulation bill were lobbied by a man wearing a hoodie and a New York Yankees baseball hat. That’s how Russell Simmons showed up on Capitol Hill earlier this month to fight a proposal to cap the fees retailers pay banks to process debit-card payments.
TAP Recommended: Russell Simmons’ Rush Card — Good or Bad for Blacks?
Rap Impresario Simmons Wins Exemption on Debit-Card Fee
(Bloomberg) — It was surely the only time that lawmakers hammering out the financial-regulation bill were lobbied by a man wearing a hoodie and a New York Yankees baseball hat. That’s how Russell Simmons showed up on Capitol Hill earlier this month to fight a proposal to cap the fees retailers pay banks to process debit-card payments.
TAP Recommended: Russell Simmons’ Rush Card — Good or Bad for Blacks?
Opinion: Russell Simmons’ Rush Card – Good or Bad for Blacks?
by Uju Okasi
Black households compose 21% of the 10 million Americans that are considered “unbanked”– unable or unwilling to open checking, savings or credit card accounts. While some find themselves on a Chex Systems database used to deny services to individuals with previous account delinquencies, others, wary of the complex fee matrix imposed by many financial institutions, choose to opt out of banking on their own.
Hip-hop mogul Russell Simmons reaches out to this population with the Rush Card, a debit card intended to provide African-Americans with a means of financial control and convenience. But the Rush Card has come under fire as critics question the card’s value to the black community. For example, professor of finance at Syracuse University, Dr. Boyce Watkins, is unimpressed with the purported mission. During an interview with radio program, “The Takeaway”, he stated, “It’s a very interesting sort of idea here. [Simmons is] saying ‘I’m giving everyone access to the American Dream,’ but I never really knew the American Dream consisted of having a piece of plastic that puts people further and further in debt.”
It’s worth clarifying a few things about the service. Many assume that the Rush Card is a credit card, but it is in fact a pre-paid debit account. Due to whatever restrictions or mistrust bar working class African-Americans from traditional banking, their options for financial transactions lie in check cashing, in-person payment, and manual cash management. Not only does this slow people down, but, as Simmons’ points out, this may even cost consumers time off work as they attempt to deliver bill payments in person.
The Rush Card extends the conveniences of direct deposit, expense tracking and online payments to individuals in desperate need of alternatives. Since the card is prepaid, it is impossible for the holder to overdraw their account and incur fees. The account also offers an optional feature, RushPath to Credit, which reports successful cable, utility, telephone and other bill payments to credit reporting agencies.
