Block Inc. agreed to a $45 million Cash App state attorneys settlement after Delaware and 45 other states said the service misled users about security and did not handle fraud well enough. Delaware will receive more than $314,000, and the deal requires Block to keep customer support available around the clock for fraud complaints, account lockouts and other consumer problems.
Attorney General Kathy Jennings announced the settlement with attorneys general from 45 other states. She said, “The strong results achieved in this case are but one example of our office’s ongoing efforts to combat fraud against Delaware consumers in the face of rapidly emerging new financial technologies” and added, “We are working tirelessly to provide meaningful oversight that keeps pace with new technologies without stifling innovation.”
Delaware and 45 states
The settlement follows allegations that Block overstated Cash App’s security, failed to properly investigate unauthorized transactions and left fraud victims without timely assistance or refunds. The Delaware Department of Justice said Block marketed Cash App in a way that suggested users’ money had protections similar to those offered by traditional banks, even though the same protections were not always available on Cash App.
Block encouraged consumers to deposit paychecks and government benefits directly into Cash App and marketed it especially to people who were unbanked or underbanked. That wider reach gave the platform a larger footprint, but the states said Block did not match that growth with the support systems needed to handle fraud complaints and account problems.
Cash App support changes
For years, Cash App did not offer telephone customer service. Consumers searching online for help were sometimes directed to fraudulent phone numbers operated by scammers posing as Cash App representatives, and those scammers could gain access to users’ Cash App accounts or other financial accounts.
Fraudsters also allegedly used publicly available $cashtags from Cash App Fridays to contact users and falsely claim they had won prizes. Some consumers whose accounts were automatically locked because of suspicious activity then waited weeks to regain access to their money.
What Block must do now
Under the settlement, Block must maintain customer support systems capable of addressing fraud complaints, account lockouts and other consumer problems. The company must provide live assistance 24 hours a day and give customers access to a person by telephone for at least 13.5 hours each day.
For users, the practical change is simple: if an account is locked, a payment looks wrong or fraud is suspected, the company must have a live route for help instead of leaving people to search online and hope for a safe number. The unresolved question is how the $45 million will be divided among the participating states after Delaware’s share and the support obligations are set.
