Banking Up Blog

Russell Simmons was all over the press last week, doing damage control about his RushCard prepaid card and its plethora of fees. He was reacting to journalists highlighting that, while he was in front of cameras in Washington fighting against the Durbin amendment about debit card interchange fees, his company UniRush was busy gouging its cardholders with an unbelievable array of fees.

Simmons accused journalists of mis-reading the table of fees listed in the terms and conditions of the card on the RushCard website and of mixing up fees for the “pay as you go” card with the fees of the “pay monthly” program to make the card appear more expansive than it really is.

Well, he missed the irony that both plans are charging “as you go”, and that there is no option to pay upfront for all services, contrary to his allegation that his cardholders could opt to buy up the card, like car shoppers would just buy a car upfront and not have to may for a monthly lease or loan reimbursement.

He even asked for a correction to be published by those publications.

Anyone can check the fee table for themselves at http://www.rushcard.com/cardholder.aspx

Here is what Robert Schmidt and Patrick O’Connor of  Bloomberg Business Week wrote in their article “How Russell Simmons Out-Lobbied Big Banks“:

Unmentioned are the fees Simmons’ company imposes for its cards, including:

• a $9.95 monthly charge (correct: pay monthly plan)
• a $3 activation fee (correct: pay monthly plan)
• $1 for every purchase if a PIN is used (correct: pay monthly plan)
• $1 for online bill paying (correct: pay monthly plan; the journalist was generous enough not to mention that just enrolling for bill payment is $2)
• $0.50 to check your balance at the ATM (correct: pay monthly plan)

So the list of fees reported by Business Week is 100% correct, and they have not attempted to mix fees from various plans to make the cards appear more expansive than they really are.

Simmons also acted as if he was being insulted by his product being called a “prepaid card”. Well, the very title of the product’s website is:

“RushCard | Prepaid card | Prepaid Debit Card | Prepaid Visa | Prepaid Credit Card”

So, dear Russell Simmons, you certainly have excellent intentions, but the folks at UniRush are doing a terrible job with one of the most expansive products in the marketplace. No amount of spinning efforts on your part will change the fact that your card is among the worst choices for the very people you claim to be helping.

Start by cleaning up shop in Cincinatti.

I am re-posting here my original Huffington Post entry.

People sacrifice their privacy for financial gain on a regular basis. This trade-off is the foundation of loyalty cards. Every day, I allow SafeWay to track my purchases, and from time to time I get 70 cents off of a box of Kleenex or something similar.

But exposing private information to the world for no apparent gain is stupid. This was made painfully clear today when social networking site Blippy exposed users credit card numbers in Google search results.
Blippy is a viral marketing engine that relies on exhibitionism. It lets people automatically broadcast their purchases, with the idea that their friends will buy the same things. I’m not sure why people want to expose themselves like this. You see, with Blippy, you’re not promised anything in return for all this free advertising and personal exposure.

Worse yet, people put themselves at risk of identity theft. Giving up some privacy and exposing your behavior to one merchant because you want a specific benefit is one thing. But exposing yourself to the entire world is stupid.

Exploiting stupidity has always been a source of business. In fact, Blippy just announced $11 million in funding from August Capital.

There’s so many great things happening because of the Internet. But because of the Internet, exploiting stupidity is more scalable.

If you thought the days of stuffing your inbox with sleazy bank card offers were over, think again.

The team at UniRush is now relying on automated programs to spam the world via Twitter. OK, maybe they are not doing it directly themselves and are recruiting affiliates to do this on their behalf. A tweet about every 10 minutes…

What are they thinking? As usual, Russell Simmons is on TV and in the press defending his good intentions, while looking the other way when his team is acting sleazy, selling one of the most expansive prepaid cards through any means, no matter how unsavory.

The Daily Show’s Wyatt Cenac examines Bank of America’s hidden credit card fees with a former employee and a mafia loan shark.

A seaside pier in Southwald, England, is now famous for featuring a”Whack-A-Banker” arcade game that is so popular that the mallets keep wearing out. Check the recent article on The Huffington Post.

For those of you who are not planning to spend the Holiday on the coast of Eastern England, there is an online game too, also courtesy of the Brits, at http://www.funnygames.co.uk/whack-a-banker.htm from a company called KewlBox.

You could be wearing out your mouse button, rather than a mallet.

In the spirit of making fun of a rather sad state of affairs that we are all a victim of, here is the illustration of a banker’s bonus check provided on the game site. I don’t know who to credit for this… anyway, kudos to the author: I had a really good laugh.

Just in case you are wondering: even though the PIG bank does not exist (yet), someone did snatch the Internet address pigbank.com