Block Inc. Reaches $45 Million Multistate Settlement Over Cash App Deceptive Practices

Maryland Attorney General Anthony G. Brown has announced a significant multistate settlement with Block, Inc., the parent company of the widely used payment application Cash App. The agreement, totaling $45 million, addresses allegations that Block made misleading claims to consumers regarding the security of their funds on Cash App and failed to adequately protect users from fraudulent activities. The settlement aims to enhance the company’s fraud and dispute resolution processes, providing a clearer pathway for consumers to seek recourse.

The lawsuit brought forth by the coalition of state attorneys general contended that Block, Inc. misrepresented the security measures in place on Cash App, creating an impression that the app offered bank-like protections. Despite a noted increase in fraudulent activity on the platform, the company allegedly continued to market Cash App heavily, particularly targeting unbanked and underbanked populations who might rely on the service as their primary financial tool. This aggressive marketing strategy, occurring while the company was aware of rising fraud, is a central point of contention.

Block Inc. has agreed to pay a total of $45 million to the coalition of states. Beyond this financial penalty, the settlement establishes a restitution program for consumers who have fallen victim to fraud on Cash App. This program is expected to range from $75 million to $120 million and will be managed by the Consumer Financial Protection Bureau (CFPB). However, the settlement grants the attorneys general the authority to administer this redress program if deemed necessary.

In addition to financial contributions, Block, Inc. has committed to several injunctive measures designed to bolster the security and customer support surrounding Cash App. The company is required to maintain customer support capable of addressing fraud complaints, account lockouts, and other user issues. This includes offering 24-hour live support, with a human representative available by phone for at least 13.5 hours a day and by live chat for at least 18 hours a day. Furthermore, Block must cease making false or misleading statements about the app’s security and fraud prevention capabilities. The company will also discontinue marketing practices that have been identified as contributing to increased fraud and will directly inform consumers about common types of scams. Crucially, Block is obligated to fulfill its legal responsibilities to investigate fraud claims and reimburse users for unauthorized transactions.

Consumers seeking more information about the restitution program can visit https://cashappcfpbsettlement.com/Home/Contact or call the toll-free number (888) 832-1301. The multistate coalition that joined Attorney General Brown in this settlement includes representatives from Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

Article by Mel Anara, based upon information from the Maryland Attorney General’s Office.

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