Attorney General Anthony G. Brown today announced a $45 million multistate settlement with Block, Inc., the company behind the popular peer-to-peer payment app Cash App. The settlement resolves allegations that Block misled consumers about the security of Cash App, failed to protect users from fraud on the platform, and didn’t provide the fraud protection and resolution process that it promised and that was required by law.
“Cash App failed to protect its users from fraud and then made it nearly impossible for victims to recover what they lost,” said Attorney General Brown. “This settlement strengthens the company’s fraud and dispute resolution practices: protections that Maryland consumers deserve when they trust a business with their money.”
The Attorney General accused Block of telling Cash App users their money was safe, falsely implying that their app provided similar protections to a bank. At the same time, the Attorney General alleges Block knew that fraudulent activity on its platform was rising sharply and instead of warning users or strengthening protections, it doubled down on its marketing.
For years, Block actively promoted direct deposits of paychecks and government benefits into Cash App. It made a particular push to reach unbanked and underbanked consumers – people who would often rely on Cash App as their primary financial account, and who were especially vulnerable to fraud. Block grew its user base without making sure it could support those users when problems arose.
Block agreed to pay the coalition of state attorneys general $45 million. The settlement also provides for a $75 to $120 million restitution program for consumers who were the victims of fraud to seek redress. That program is to be run by the Consumer Financial Protection Bureau (CFPB) through a prior settlement with that agency but provides the attorneys general authority to administer the same redress program instead of the CFPB if necessary.
Under the settlement, Block has also agreed to injunctive terms to address the security of its payment platform for consumers, including to:
- Maintain customer support that can resolve fraud complaints, account lockouts, and other problems.
- Offer live support 24 hours a day, with a human available by phone at least 13.5 hours a day and by live chat at least 18 hours a day.
- Stop making false or misleading claims about Cash App’s safety and how it protects users from fraud.
- Discontinue marketing practices known to increase fraud on the platform.
- Directly educate consumers about common types of fraud.
- Fulfill its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions.
The state attorneys general that joined Attorney General Brown in today’s settlement are 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.
Consumers who wish to obtain more information about the redress program can go to: https://cashappcfpbsettlement.com/Home/Contact or call (888) 832-1301 (toll-free).
