Block to pay $45 million to settle Cash App fraud claims

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. Block denied any wrongdoing in the settlement.

State attorneys general said Block misled users by falsely advertising that Cash App provided bank-like protections, including advanced fraud detection. According to the states, several specific platform weaknesses made the app easier to exploit:

• Cash App allowed users to create accounts without a Social Security number or date of birth, and didn’t place limits on the number of accounts a person could open, making it easier for scammers to exploit the platform.
• Cash App didn’t provide an official customer support phone number, and many users who were locked out of their accounts turned to fake customer service numbers that were operated by scammers.

The settlement follows an earlier action by the Consumer Financial Protection Bureau (the U.S. federal agency responsible for consumer protection in financial services), which had similarly accused Block of failing to investigate fraud claims or provide adequate customer service. That case resulted in $175 million in penalties and other redress for consumers.

Under the new settlement, Block will improve Cash App’s fraud prevention measures and provide live customer support for users of the app.

Why it matters

The settlement marks the latest chapter in regulators’ scrutiny of Cash App’s business practices, coming after the Consumer Financial Protection Bureau’s earlier $175 million action against Block over similar failures. As fintech apps increasingly function as primary banking services for millions of users, this case signals that regulators are treating consumer-protection gaps in these platforms with the same seriousness as traditional banking failures.