Block, Inc., the parent company of the Cash App payment service, has agreed to pay $45 million to settle allegations from 46 state attorneys general concerning the app's security practices and user disclosures. The states claimed that Cash App misled users about its security measures, failed to adequately protect them from fraud, and did not provide promised dispute resolution.
According to the allegations, Cash App incorrectly suggested it offered the same protections as traditional banks. State officials stated that the company was lax in its verification standards, lacked a phone number for customer support for an extended period, and used deceptive social media promotions that left users vulnerable to scammers.
Investigators found that the absence of an official customer service phone number led users to search online and inadvertently contact fraudulent numbers set up by scammers. The report indicates that Block was aware of this issue but did not warn users or establish a legitimate phone line until 2021.
Further claims suggest that Cash App's signup process did not require a Social Security number or date of birth, and there was no limit on the number of accounts an individual could create. This, according to the allegations, enabled malicious actors to operate networks of fraudulent accounts. The company also allegedly delayed internal fraud investigations and imposed unwarranted account lockouts, preventing victims from recovering stolen funds.
As part of the settlement, Block is required to maintain live customer support 24 hours a day, with at least 13.5 hours of that coverage provided by a human representative. This agreement reaffirms a separate federal settlement from January 2025, where Block agreed to pay between $75 million and $120 million to states under an order from the Consumer Financial Protection Bureau.
New York Attorney General Letitia James stated that the company failed to assist users who were victims of scams and did not provide the fraud protection mandated by law. Texas Attorney General Ken Paxton noted that Cash App's practices exposed users to fraud and that the company's response to internal investigations and account issues left victims without recourse. Texas is set to receive $5 million from this settlement, while New York will receive $1.6 million, with smaller amounts allocated to states with lesser populations.
Block, Inc., founded by Jack Dorsey, also owns the payment technology company Square and the music service Tidal. As of the announcement, neither Block nor Cash App had released an official statement regarding the settlement.
