Jasmine Jackson needed a fresh start.

In the first week of October, the Beverly, N.J., single mother of two moved into a new apartment, two years after she was put on a waiting list for low-income housing. She was homeless for half that time, shuffling her 6-year-old daughter and 7-month-old son from one temporary home to the next while she saved the money she would need to cover their first month’s rent. She works full-time at a local nonprofit, earning a salary that barely keeps her family above the poverty line. When her first paycheck of the month was deposited, she planned on buying a new refrigerator and a crib.

“I was thinking yes, I‘m here, finally I can start over,” she says. “And then I checked my account balance. I had nothing. Absolutely nothing.”

Jackson is among thousands of RushCard's estimated 3 million prepaid debit card customers who lost access to their accounts on Oct. 10. The company, co-founded by music mogul Russell Simmons in 2003, blamed the lapse in service on a software glitch that occurred while it upgraded its transaction processing software. In a statement issued Oct. 19, Rick Savard, CEO and Chairman of RushCard, said the system was “back up and running,” despite hundreds of comments from customers who still claimed their funds had not been returned. “RushCard employees are working around the clock to get every single customer full access to their funds,” he said.

Jackson is still waiting. She says she’s called the company more than 50 times and got through to a representative only twice. Two pay periods have gone by and so far only part of one of her paychecks has registered in her RushCard account. She withdrew the funds from an ATM and stocked up on diapers and baby formula. By her estimation, she is still missing about $350. “I am literally at my wit’s end because I don't know when I will have the rest of my money,” she says. “I don’t even have enough to cover next month’s rent.”

She has made one decision, however. She’s done with RushCard. On Thursday, she scheduled a meeting at a bank to open a new checking account.

“You can’t just take people’s money,” she says. “People are out here hurting.”

Frustrated with few options

For RushCard customers who were burned by the software debacle, their options for recourse are limited. Part of the reason prepaid debit card use has ballooned over the last few years is that traditional banks have become prohibitively expensive for low-income workers. Some big banks charge monthly fees of $12 unless customers maintain a minimum balance of $1,500, an amount some people, like Jackson, simply can’t keep on hand. Prepaid cards charge fees, too, of course, but they typically don’t require minimum balances and monthly fees can be significantly lower than some big bank accounts (RushCard customers pay $5.95 to $7.95 per month).

Prepaid cards are also useful alternatives for customers who have poor banking histories and can’t get approved for traditional bank accounts. Most cards do not allow customers to overdraw their accounts.

“We’ve been pretty supportive of prepaid cards because our research shows these products could be a really good alternative for somebody who wants an account but can’t use a bank account,” says Susan Weinstock, director of the consumer banking project at The Pew Charitable Trusts. “We certainly didn’t see this coming.”

For customers looking for prepaid debit card alternatives to the RushCard, they can start by researching fees on sites like NerdWallet or Bankrate. As much as customers are using the RushCard’s Facebook and Twitter feeds as a forum for complaints, they’re also helping one another suss out better options.

That’s where Shaniqua Pope of Mesquite, Texas, learned about the American Express Serve prepaid debit card. The 40-year-old, who works at a retail shipment center, filled out an application Wednesday. The $1 monthly fee is lower than the $5.95 the RushCard charges, which helps make up for the fact that not all retailers accept AmEx.

“I’m not going to deal with RushCard anymore,” Pope says.

‘Second chance’ bank accounts

Many prepaid debit card customers have been bumped out of the traditional banking system when they develop a poor banking history, which can happen if they overdraw their accounts, bounce checks or open and close savings or checking accounts too often (80% of banks and credit unions in the U.S. use ChexSystems, a consumer reporting agency, to see how often customers have closed checking and savings accounts in bad standing).  

But consumers with a less-than-stellar banking history still have options beyond prepaid cards. Two national banks, Green Dot, offered by Walmart, and Wells Fargo, offer their version of a “second chance bank account.” These accounts, which might be listed under a name like “opportunity checking,” are offered by a number of regional and local banks as well (here’s a comprehensive list from Nerdwallet). Kind of like a secured credit card, which helps people rebuild their credit histories, second chance accounts help customers build up their bank history.

Jackson heard about Wells Fargo’s Opportunity Checking Account while browsing RushCard’s Twitter feed. There’s a $10 monthly fee but it can be waived so long as she makes 10 debit purchases per month.  She made an appointment for Thursday and plans to dump her RushCard.  

There are also online banks that offer fee-free checking accounts, like Capital One 360, Ally Bank, and Simple.

Taking them to court

Thousands of poor customers left penniless by a big financial services company? It sounds like any class action attorney’s dream case. Unfortunately, like the majority of financial products and services, the RushCard bans customers from filing class action lawsuits. Their only legal option is to file a case to be handled in arbitration, which can be expensive.

“Customers would have to go to a lawyer to see what the damages are and see if it’s cost effective,” says Christine Hines, Legislative Director of the National Association of Consumer Advocates. “But these are low-income people. I don’t think they’ll be able to take on the cost of arbitration."

Arbitration likely isn't an option for RushCard customer Christina Albertson, 34, of Ashland, Ky.

“Maybe I would do arbitration if I had a lot of money on there, but it’s not enough to where I’d want to waste my time and money going through that process,” says Albertson, who works at a diner as a cook. She has used the RushCard for two years to deposit her child support payments. Two of those payments have yet to appear in her account. She’s leaned on friends and family to help with grocery and gas expenses.  

“When I do [get my next paycheck], I’ll be paying other people back so it’ll still be another week or so before I actually am able to start using the money,” she says.

Affected consumers can file complaints with the Consumer Financial Protection Bureau (submit one here), but even though the watchdog has successfully recouped losses for consumers in cases like this in the past, it could take years for folks like Jackson to receive compensation. In an ironic twist, the CFPB is expected to finalize new rules for prepaid card companies like UniRush in January. The rules, which mostly pertain to transparent fee disclosures and fraud liability, probably would not have made a difference to RushCard users, says Weinstock.

In the meantime, Simmons and his team haven’t exactly impressed customers with their response to the mess. They offered a “fee-free” holiday service period, in which no fees would be charged for RushCard customers from Nov. 1 through Feb. 29. Russell Simmons posted a video apology to the company’s Facebook page four days after the glitch became public.

Rosemary Farmer, a call center operator from Wichita, Kan., wasn’t impressed. She was eating dinner at a restaurant on Oct. 10 when her RushCard was declined. After waiting two hours on hold with customer service, she was only able to leave the restaurant after her waitress offered to pay her $30 bill. On Oct. 21 Farmer was finally able to access her account. Like Jackson, she immediately emptied it. She also filed a complaint with the Better Business Bureau.

“I’m definitely not staying with RushCard,” says Farmer, 23. “Even though I got my money back, I’m still going to take action so they know they can’t just screw around with thousands of people's money and expect to get away with it.”  

Are you dealing with RushCard problems? We'd like to hear from you.

Mandi Woodruff is a reporter for Yahoo Finance and host of Brown Ambition, a weekly podcast about career and finance. Follow her on Tumblr or Facebook.