Block agrees to $45M settlement with 46 states over Cash App fraud

Block has agreed to pay $45 million to settle claims brought by 46 U.S. states alleging that its peer-to-peer payments app, Cash App, failed to adequately protect users from fraud. State attorneys general stated that Block misled users by falsely advertising that Cash App provided bank-like protections, including advanced fraud detection, which Block denied.

According to the states, Cash App's lax security measures, such as allowing account creation without a Social Security number or date of birth and not limiting the number of accounts a person could open, made it easier for scammers to exploit the platform. The states also alleged that the absence of an official customer support phone number led users locked out of their accounts to seek out fake customer service numbers operated by scammers.

Many Americans rely on fintech apps for banking services, leading to increased regulatory oversight. This settlement is the latest development in regulators' scrutiny of Cash App's business practices, following an earlier action by the Consumer Financial Protection Bureau. That prior action similarly accused Block of failing to investigate fraud claims or provide adequate customer service, resulting in $175 million in penalties and other consumer redress.

Under the terms of the new settlement, Block is committed to improving Cash App’s fraud prevention measures and customer service. This includes implementing live customer support for users of the mobile payments platform.