Block Secures $45 Million Settlement with 46 States in Cash App Fraud Investigation
Block has reached a $45 million settlement in response to allegations from 46 U.S. states that its peer-to-peer payment service, Cash App, inadequately safeguarded users against fraud.
Attorneys general from the states indicated that Block misled users by falsely claiming Cash App offered bank-like security features, including enhanced fraud protection measures. Block has refuted these allegations.
The states argued that Cash App permitted users to set up accounts without linking to a Social Security number or providing a date of birth. Furthermore, there were no restrictions on the number of accounts an individual could create, facilitating exploitation by fraudsters. They also contended that the absence of an official customer support number led many users, who found themselves locked out of their accounts, to seek help from fraudulent customer service numbers operated by scammers.
With an increasing number of Americans turning to fintech applications for their banking needs, regulatory oversight has intensified. This settlement marks another aspect of the regulatory examination into Cash App’s business methods. It comes on the heels of actions taken by the Consumer Financial Protection Bureau, which previously accused Block of neglecting fraud investigations and failing to provide sufficient customer support, resulting in penalties and restitution totaling $175 million.
As part of the agreement, Block is committed to enhancing Cash App’s fraud prevention strategies and customer service, which will include the introduction of live support for users of the platform.
Initial reports of the settlement were provided by Reuters. Block did not immediately respond to requests for further comment.
