Russell Simmons Faces Class Action Lawsuit for RushCard Glitch

Russell Simmons is facing a class action law suit as a result of his RushCard misstep. For nearly two weeks, some RushCard users were unable to access their funds due to a technical glitch at the company. According to DailyMail, five users have filed suit against Russell Simmons, the owner and founder of the service, in a New York court on Friday (Oct. 23). The hip-hop mogul is being sued for negligence, fraud, breach of contract and violation of the New York Deceptive Acts and Practices law.

According to court documents obtained by DailyMail, the suit states that, "Plaintiffs and class members were fraudulently induced into purchasing RushCards and depositing money into their RushCard accounts because they were led to believe their funds would be 'safe and protected' with unhindered access to these monies."

On Oct. 12, the company underwent scheduled maintenance to switch to a new transaction processing vendor. The following day, scheduled direct deposits did not reach certain accounts and some users were met with a $0 balance. These users took to social media to express their frustrations with the defect, as well as the company's customer service response following the incident. Because of technical glitch, users say they were unable to purchase basic necessities or pay for bills, and later faced late fees. Some claim to have been charged fees for their failed ATM withdrawal attempts when the RushCard system was down. The five people in the suit and class members are demanding damages and restitution from Simmons as a result.

On Friday, RushCard declared a "Free-Holiday Season" from Nov. 1 to Feb. 29 where people can use their RushCard without incurring fees. View the class action claim below.