The Florida Attorney General’s Office has issued subpoenas against five prepaid debit card companies claiming they may be forcing consumers to pay hidden fees each time they make a purchase.

Subpeonas were issued against five prepaid card companies including the makers of the RushCard, a company owned by Def Jam co-founder and hip hop mogul Russell Simmons. The investigation, which is being overseen by Florida Attorney General Pam Bondi through the Economic Crimes Division, will determine if some of these companies misrepresented their products by promising to improve credit scores.

First Data Corporation, Green Dot Corporation, Account Now, Inc., Netspend Corporation and Simmons’ company, Unirush Financial Services, LLC were all named in a press release issued by the Florida Attorney General’s office last Thursday.

Also at that time, Simmons’ company released a statement in response to the subpoena defending the transparency of the RushCard and welcoming all debate and questions.

“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.”

More than 60 million Americans currently use the RushCard, which can be used anywhere Visa debit cards are  accepted. Its website boasted that RushCard holders would pay no more than $15.90 using its prepaid debit card in comparison to the $40.67 and $41.88 they’d pay on checking account and check cashing store services, respectively.

None of the other four companies had released statements regarding the Florida Attorney General’s investigation as of Thursday, May 26.

Prepaid Cards: An (Slightly Less Risky) Alternative to Checking Accounts:

Simmons’ case for prepaid debit cards definitely holds weight, and numerous studies have helped to strengthen the case for prepaid cards. A study conducted by financial services consulting company Bretton Woods Inc. showed that consumers using prepaid cards ate an average of $73.35 in annual fees in comparison to the $218 absorbed by traditional checking account holders.

Read: Study: Prepaid Cards Offer Fewer Fees Than Checking Accounts

Prepaid checking accounts have also become more attractive to consumers as more banks such as Bank of America®, Chase and Wells Fargo end free checking services and debit card rewards programs in the face of heavier federal regulations. They allow consumers that may or may not be able to open a traditional checking account to load funds onto the card and use it as they would a traditional debit card to pay bills and make purchases.

UPDATE:

We’d like to thank our readers who spoke up regarding the number of individuals using the RushCard. After putting out a number of calls and sending an email to the company we’ve still been unable to determine exactly how many individuals actually use this prepaid card. One representative for the company even informed us that the company doesn’t keep these type of records. If and when we are able to determine the number of RushCard users there are we will make that information available as soon as possible.

 

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  • Gertrina4u

    i had a rush card when it first came out and i quickly got rid of it, it was crazy i put money on it and went to use it to get gas and was not able to use it they told me when i called and asked why that i need a deposit of 300.00 on the card to get gas i was like this is stupid and that was the last time i used it. 

    • Bossladii74

      This is exactly what happened to me same exact thing I kid you not and I aint used it since it was a rip off…

    • Bossladii74

      This is exactly what happened to me same exact thing I kid you not and I aint used it since it was a rip off…

  • Coreygriffin520

    i had my set-up for direct deposit and when i use it to get money out of a atm i get charged from the machine whatever there fee is i know but the rush card charges me an additional $2.50 and that’s not cool. so i recently stop using it maybe for a bill or two but thats about it.

  • What do you expect the man knows how to make money. Could you imagine 60,000,000 using the card could you imagine that by 40 something dollars?

  • What do you expect the man knows how to make money. Could you imagine 60,000,000 using the card could you imagine that by 40 something dollars?

  • Denise Nicole

    The Rush Card is predatory. I just looked at the fee schedule and the fees charged are ridiculous, even for a prepaid card. Monthly fee $9.95, plan change fee, $1 per transaction fee. If you need a prepaid debit card I recommend the wiredplastic.card.

  • Denise Nicole

    The Rush Card is predatory. I just looked at the fee schedule and the fees charged are ridiculous, even for a prepaid card. Monthly fee $9.95, plan change fee, $1 per transaction fee. If you need a prepaid debit card I recommend the wiredplastic.card.

  • PRETTYGIRL1718

    I’VE BEEN A RUSH CARD MEMBER SINCE IT CAME ABOUT. AND I LUV IT!!! I NOW HAVE ALL 3 CARDS….I LUV THE FACT THAT THEY GIVE YOU CASH BACK ON THE 15TH OF EVERY MONTH.AFTER YOU FIRST TEN TRANSACTIONS.IT HAS BEEN TIMES WERE I’VE GOTTEN OVER $40 CASH BACK!!! 😉

    • Atrwaj

      I also have been  with the “RushCard’ for years!!!…No problems here!.(Chicago) in fact you-all should compare this one with the others on the market. By far the RushCard is the Best!

    • Atrwaj

      I also have been  with the “RushCard’ for years!!!…No problems here!.(Chicago) in fact you-all should compare this one with the others on the market. By far the RushCard is the Best!

  • Jesse Styles2010

    Carolyn.. Get your facts right! 60 million people DO NOT have a Rush Card?? Reckless journalism at its worse!! Maybe you meant to say there are 60 million unbankable consumers..SMH

    • M12colvin

      Its possible that 60 million people have purchased a Rushcard card, alot of them may not have funds on the card but it is possible. I have been a Rushcard user since I decided to manage my money due to Bank  of America charging me ridiculous overdraft charges. I was charged $35 for a $2.16 purchase, along with alot more of ridiculous charges. So I just use my banking account for the savings. I never had a problem with my RushCard. Pro: I started off having half of my work check direct deposited onto the Rushcard, and the other half into my savings with Bank of America. Rushcard did not charge me the $9.95 monthly fee because of the this (you have to be wise and play their game with the unnecessary fees). The only fees they charge are when I make a purchase and its only $1, and you can only spend what you have on the card (they dont allow you to use funds that are not there and they charge you $35 for every transaction you made after the money ran out). Plus Rushcard give you the money back every month (the $1 they charged you for every transaction you meade is given back to you)-they are the only prepaid company I know that does that. Con:I do not like the fact they make you do all their work like if charges are debited off your card and you or whoever attempts to put the money back on the card, they can’t. They make you go though all these unnecessary steps and they take to long to put the money back on the card, now that is ridiculous. Other than that the card is ok, it helps me out alot with paying bills.

  • Moneysayver

    If you’re able to get a bank account with a check card, I really don’t see the point in using pre-paid cards as a regular form of payment or bank substitute.  Find a local credit union you can join.  Their fees are usually less than the big banks and tend to be easier to get a loan.  If you have a military connection, USSA is great.  I get a debit card rebate each month plus they refund any ATM fees I get charged by other banks.

  • Keisha3637

    As a rushcard holder. I love it and have no problems using it. I even hv direct deposit with it and I never had problems with it either. I prefer it over a bank anyday.

  • Rosesdiamond13

    I had an AccountNow card when it first came out but got rid of it. Then I went to the Rush Card, and not more than month later, I got rid of it as well.  Reason number one was because of all the ‘hidden’ fees. They tell you that you get the ‘extra’ money back around the 15th of the month, but who wants to wait to get their own money back? I think its all a rip off.

  • KaMella16

    I’ve never had problems with my card. I was with Bank of America someone stole my checks and I went to court, the thief went to jail, but Bank of America made me pay back all thr nsf fees that racked up which was over $1000. Rushcard has been the best since 2003.

  • Pawsglo

    Its really sad because I thought the rush card was a great African American investment but my God I went and put money on it the first time and incurred a fee for just owning the card or activating the card. Also I went to remove all the money off the card by way of ATM and the machine charged me and then the rush card company charged me. I haven’t used it again since and i don’t plan on it. So please know that this card is not a good choice.

  • Wooshi_2000

    I have 2 rush cards and all of my family members have them and we’ve had NO PROBLEMS, we use them for gas, groceries, bills, and it cheaper to transfer money to another cardholder then going to western union or money gram, in my opinion the Rush Card has been a benefit to my family.

  • heisoutasight

    RushCard has got to be one of the highest fee based debit cards on the market. If you read their disclosure, you’d know exactly how fast a customer is being taken, one transaction at a time.

  • Susan Washington-Donaldson

    I use the rush card. I was a little taken aback by the 1.00 fee I get charged each time I use it. there are no ATM’s associated with it so BOA charges 3.00 to use their ATM plus the 1.00 I get charged from RUSH CARD as a convenience fee. I would go to wal-mart and just get charged 3.00 to cash my check but then I would have to carry all that money around. so I guess it’s not bad I mean what’s the alternative?

  • HateRushCard6996

    wow.. i just got a rush card in the mail today so i can buy a phone online, and i got cash put on it today, but the card is saying insufficient funds? wtf?! what should i do? i just lost like $215

  • Grapelands_star

    well i havent received any money back after my first ten transactions yet

  • megan

    I’m really bummed, I can no longer be a rushcard member, the first time I activated my card I only added 20.00, they took 15.00, but I was never ever charged anything ever again, I love Rushcard, I love the customer service, they are always friendly, they are very helpful, a few times charges were made from my account that I didn’t make, they helped with complaints, and within 31 days of my compliment the money was returned to my card, they no longer have any pretty female card designs, so since I can’t get the Pink baby phat card, I currently have now, and I don’t like any of the new designs, I probably have to find a company that has prettier more feminine cards.

    • Simon Zhen

      Glad that the card is helpful for you, which makes it seem like an odd move to close the card simply due to the card design. In any case, what other prepaid card are you considering?