RushCard's New Security Features: What You Need to Know

Almost a year after a glitch locked thousands of people away from their money and out of their accounts, the prepaid debit card provider RushCard is revamping for cell phone technology. With the new mobile phone app, customers have access to an account-freeze feature that allows them to temporarily put their accounts on hold if they misplace their cards, as well as the opportunity to open the app by fingerprint for additional security. The card will also give customers electronic access to a discount prescription program at Wal-Mart Stores Inc. and eliminate the need for them to carry related prescription cards.

The popular prepaid debit card, founded in 2003 by hip hop producer and celebrity Russell Simmons, is used by many low-income consumers without access to traditional bank accounts who need to put money on the card to pay their bills or get paychecks electronically deposited.

The company faced a torrent of social media complaints in October when customers were locked out of their accounts over a 19-day period, blocking their ability to pay bills and access their paychecks and savings. In May, the company agreed to pay $19 million to the disgruntled customers, plus $1.5 million in attorney fees.

Following the debacle, RushCard issued a statement on its Facebook site, explaining how the glitch had been caused when upgrading to a new processing partner during an effort to improve its customer experience on October 11.

“Unfortunately, the transition did not go as planned and some of you experienced hardship as a result,” said the Facebook post. “If you were impacted, we can’t begin to express both how sorry we are for the pain that you’ve experienced and our commitment to make this right.”

RushCard waived its fees from November 1 through February 29, 2016 to try to make amends.

What to Do If Your Account Is Frozen

If you do find yourself locked out of your cash card account, it’s wise to stop your direct deposit and request a paper paycheck. People can do this by contacting their payroll company to stop the direct deposit process.

And if your account is frozen when you have rent or a bill due, there are several things you can do to quickly come up with the money you need. If possible, it might be a good idea to open a traditional checking account and get a debit card, which can be easily replaced if lost or stolen.

Ultimately, secured credit cards are significantly safer than prepaid debit cards. These cards require a cash collateral deposit which serves as a credit line for the account. And secured cards also can help you establish or improve your credit as credit issuers will report your payment history to the credit reporting agencies.

Of course, you’ll need to make on-time payments to all of your creditors and keep your balances low relative to credit limits. You can keep track of how your credit scores are improving by getting your two free credit scores, updated every 14 days, on Credit.com. It’s also a good idea to pull your free credit reports, which you can do every year at AnnualCreditReport.com.

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