This is very bad for the users of the RushCard. Some people have their checks direct deposited onto the card. People need their money to pay bills and buy food.
Fewer checks are being issued now days. Employers want to direct deposit their payroll. If employees don’t have a checking account, the pay can be deposited onto a prepaid debit card. RushCard is just one of the prepaid debit cards on the market. Their are other, lower fee cards available.
Prepaid debit cards are issued by banks. Then there is the celebrity/marketer/administrator that is directly interfacing with the customer.
Looking on the RushCard website, I found that the RushCard is issued by Metabank.
https://rushcard.com//legal/Cardholder-Agreement
I am curious as to what is causing the problems, and how is it going to be fixed. Is the problem at the RushCard level or the Metabank level? The article doesn’t give very many details.
My company makes direct deposit a “condition of employment” so we are 100% direct deposit for payroll and for our expense reimbursement system and I love it both as a payroll manager and as an employee.
We also no longer pre-note direct deposits for new employees or when employees close and open a new account as long as they provide a voided check or documentation from their bank with the routing number and account number, so from their very first pay, it goes direct deposit – no live checks!
We are also 100% paperless under an initiative I undertook a few years ago; no more mailing of paystubs/direct deposit vouchers (and at a big savings in just the postage cost alone plus the printing and delivery charges by our payroll processor). Instead employees go on line through the ADP self service portal to view or print their paystubs. We do provide computer kiosks with printers in each building so manufacturing employees without a desk and their own work computer, (or without computers at home or smart phones) have access.
The rules on mandating direct deposit or paperless pay varies from state to state; some don’t allow mandating direct deposit or paperless pay at all, some say it is by “opt in” only, but some will allow direct deposits to employer issued pay cards as long as there is no fee to the employee to withdrawal their funds each pay, and with some limits on the other fees that can be charged, and paperless, if the employer provides a way to access their pay stubs on line at work and at no cost as we do.
Many of the big payroll processing companies like ADP and Ceridian now offer low fee to the employee pay cards that are compliant with various state rules as an option to employers if any of their employees don’t have bank accounts, but those cards are also portable – they keep them and they revert to a regular pre-paid debit card if they leave the company. These pay cards can also be used to pay bills on line and to make purchases at retailers and typically allow the employee to deposit funds to it from sources other than the employer’s direct deposit but some do charge fees for those other transactions.
Of course if an employee chooses to have their pay direct deposited to a pre-paid debit card that they opened themselves, like the RushCard, then fees and any access issues is between them and the bank issuing the card, just as it would be with a bank checking account. If an employer issued pay card like those offered through ADP or Ceridian, then access issues, not having access to their funds, could become an issue for the employer too.
FWIW, dealing with “live checks” is a hassle for the employer and more expensive and time consuming compared to direct deposit. There are those employees who lose their checks, and we have to put a stop payment on it at a cost that we can’t legally pass to the employee, then wait several days to reissue as a manual check, to make sure it didn’t clear; or they fail to cash them and when they go stale and have to be reissued or after a certain amount of time, if they don’t clear, escheat to the State’s Unclaimed Property division. And then there are always those who don’t advise us when their address changes so their live checks or paystubs don’t get delivered in time or they get lost in the mail, I’ve even had more than one employee have checks and or pay stubs stolen from their mail boxes.
I had an employee once angrily complain to me (who had direct deposit but who didn’t opt to go paperless before we mandated paperless), that her pay stub was stolen from her mail box and her concerns about identity theft. While I understood her concerns, I had to explain to her that it wasn’t my problem - once we put her paystub in the USPS box for delivery, what happened to it afterward was beyond my control and that she should contact the Postal Inspector at her local USPS and or file a police report. I did provide her with some general information on identity theft (https://www.identitytheft.gov/), but also reminded her that our pay stubs didn’t have her SSN or bank account numbers printed on them. But she wanted us to pay for identity theft protection, but as this was not a “data breach” on our end, it was not our problem but an issue for the USPS and or the police.
I remember back when, when either your boss would hand you your check, or you’d have to go to the payroll office each payday and even sign a form that you received it, and then you’d have to rush to the bank during lunch or after work to deposit it. And if you happened to be off that day, on vacation, etc. wait for it to come in the mail. Why anyone with a bank account or access to a low fee employer provided pay card would not want their pay direct deposited is beyond me.