RushCard contract doesn't allow customers to sue

ATLANTA — Consumer advocates say the hardships brought on by this week's glitch with popular pre-paid debit cards show the need for a new set of rules between customers and their banks.

Federal regulators have plans to ban financial contracts that mandate binding arbitration over lawsuits. In other words, contracts that say customers do not have the right to sue the company.

"I think they deserved to be sued, but apparently, we don't have that right," said J.L. Worrford, of Gainesville.

He told consumer investigator Jim Strickland his family had not eaten in two days because all their money was tied up in the RushCard debit system; the system crashed over the weekend during a computer upgrade.

The contract says in case of a dispute, neither party will have the right to a jury trial, and it forbids class action lawsuits.

Atlanta attorney Ryals Stone backs a proposed federal rule to outlaw financial contracts that forbid customers from join together in court, saying such contracts favor the company.

"It limits their liability and their accountability to the consumer," said Stone.

The contract also says the only other recourse is to choose to no longer be a customer, which is what Bryan Tucker, of College Park, did when he finally got his card to work.

"We are done with RushCard," he said.

One of RushCard's main advantages is those with direct deposit get their money two days early. Founder Russell Simmons says this week, that's not going to happen. He won't say how many customers are affected.

WSBTV