Block will pay $45 million to settle allegations from 46 U.S. states that Cash App failed to adequately protect users from fraud, even as it marketed the platform as offering protections similar to those of a bank.
TL;DR
- Block agreed to a $45 million multistate settlement and denied wrongdoing.
- Cash App will add live support and strengthen fraud prevention.
- States said weak account controls and missing phone support exposed users to scams.
- The deal follows earlier penalties and a separate $20 million Washington settlement.
Why Cash App’s $45 Million Fraud Settlement Matters
The settlement puts pressure on Block over how Cash App handled fraud, account security, and customer complaints. State attorneys general said its advertising falsely suggested that Cash App offered bank-like safeguards, including fraud detection, while users allegedly faced fewer protections.
The states also claimed that Block responded to rising fraud by expanding marketing instead of strengthening controls. Users could create accounts without a Social Security number or date of birth, and there were no limits on how many accounts one person could open.
Regulators said those conditions made the platform easier for scammers to exploit.
How Cash App’s Missing Phone Support Exposed Users
The investigation focused on Cash App’s lack of an official customer support phone number. Locked-out users searching online for help sometimes reached fake support numbers operated by scammers.
Under the settlement, Block must overhaul its customer service and fraud prevention systems. Cash App will provide 24-hour support, with live phone agents available for at least 13.5 hours each day.
Block said the agreement “resolves a previously disclosed legacy matter that primarily relates to historical aspects of our business.” Cash App has made significant investments in consumer protection, customer service, and compliance.
“We share the commitment of the attorneys general to addressing industry challenges and continue to invest in operations and technology to promote a safe and healthy financial ecosystem,” Block said.
Topics For More Insights
Block Faces Broader Cash App Regulatory Scrutiny
The $45 million agreement is the latest regulatory action involving Cash App. The Consumer Financial Protection Bureau previously accused Block of failing to investigate fraud claims or provide adequate customer service, leading to $175 million in penalties and consumer redress.
Block agreed to pay $20 million to settle a Washington lawsuit alleging that Cash App processed $22 million in fraudulently obtained unemployment benefits over five months in 2020. Block denied wrongdoing in that case.
Last year, the company agreed to pay up to $120 million, including $40 million to New York, to resolve claims that Cash App had not done enough to prevent money laundering.
All U.S. states joined the new settlement except Hawaii, Missouri, South Carolina, and Wyoming. As more consumers use fintech apps instead of traditional bank accounts, the deal signals that regulators expect stronger fraud controls, clearer support, and protections matching platform marketing.
