- Key insight: Block allegedly falsely advertised "advanced fraud detection" and secure account protocols when predatory scams were permitted to proliferate.
- What's at stake: Block has paid several multimillion-dollar settlements to federal and state authorities for failing to provide any live customer service agents for Cash App.
- Forward look: The settlement includes a provision requiring Block to provide a 24-hour customer service, and cease and desist all misleading advertising about its security features.
A bipartisan coalition of state attorneys general ordered Block to pay $45 million to resolve claims that it failed to protect users from fraud, misleading them about the safety of its payment platform Cash App.
On Wednesday, the $39.9 billion-asset Block, in Oakland, Calif, agreed to
In a surprise move, the state AG settlement requires Block to honor a 2025 agreement with the Consumer Financial Protection Bureau made in the final days of the Biden administration. That settlement required Block to
California Attorney General Rob Bonta said the state settlement was needed "if the Trump Administration decides to let Block off the hook."
"Today's settlement ensures Block can't go back on its already-brokered promise to the Biden Administration to provide redress to consumers it harmed," Bonta said in a press release.
The states allege that Block failed to provide any live customer service agents for Cash App, leaving consumers with no recourse when they became victims of fraud that, in some cases, was caused by Block's own marketing programs. Some Cash App users who got locked out of their accounts for suspicious transactions had no way to access their money or reach Cash App.
Pennsylvania Attorney General Dave Sunday said that because Block's sign-up process required minimal identity verification, fraudsters were able to create fake 1-800 numbers that consumers would turn to when they searched online for a phone number to contact Cash App, which had no customer support.
Block also ran a social media promotion called Cash App Fridays that encouraged users to publicly post their Cash App identifier for a chance to win a weekly prize. Fraudsters would contact those users, tell them they'd won the prize and trick them into handing over their login information. Block knew about the scams but continued running the program for years, the Pennsylvania AG's office said in
Under the settlement, Block now has to maintain 24-hour-a-day customer support, with a real person available by phone at least 13.5 hours a day.
Block denied wrongdoing.
"We've reached an agreement that resolves a previously disclosed legacy matter that primarily relates to historical aspects of our business," said Block spokeswoman Leslie Pitterson. "Cash App has made significant investments in consumer protection, customer service, and compliance in order to safeguard and serve the tens of millions of Americans who rely on Cash App to meet their banking and credit needs."
Pitterson added: "We share the commitment of the attorneys general to addressing industry challenges and continue to invest in operations and technology to promote a safe and healthy financial ecosystem."
Jack Dorsey, Block's CEO, has been aggressively
As part of the settlement, Block has to stop all misleading marketing about Cash App's safety and how it protects users from fraud. The state probe found that Block had failed to investigate unauthorized transactions or issue refunds in violation of the Electronic Fund Transfer Act and Regulation E. The company now has to provide training on investigating and resolving unauthorized electronic funds transfers.
The $45 million fine will be divided among the participating states based on population. Four states did not take part in the settlement: Hawaii, Missouri, South Carolina and Wyoming.
