Block Agrees to $45M Settlement with 46 States over Cash App Fraud Allegations

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. State attorneys general said they found that Block misled users by falsely advertising that Cash App provided bank-like protections, including advanced fraud detection.

Block denied wrongdoing. According to the states, 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. The states also alleged that because Cash App didn’t provide an official customer support phone number, many users who were locked out of their accounts turned to fake customer service numbers that were operated by scammers.

The settlement marks the latest chapter in regulators’ scrutiny of Cash App’s business practices, following earlier action by the Consumer Financial Protection Bureau , which had similarly accused Block of failing to investigate fraud claims or provide adequate customer service, resulting in $175 million in penalties and other redress to consumers. Under the new settlement, Block will improve Cash App’s fraud prevention measures and customer service, including by providing live customer support for users of the mobile payments platform. News of the settlement was first reported by Reuters .

Block did not immediately respond to TechCrunch’s request for comment. The settlement with Block highlights the growing regulatory scrutiny of fintech companies and their responsibility to protect users from fraud. As peer-to-peer payment apps become increasingly popular, regulators are paying closer attention to their business practices.

This settlement serves as a reminder that companies like Block must prioritize robust fraud prevention measures and responsive customer service. For developers and businesses, this means investing in robust security protocols and transparent communication with users. For consumers, it underscores the importance of vigilance when using digital payment platforms and being aware of potential red flags.

The agreement also raises questions about the long-term implications for Cash App's business model and its ability to compete in an increasingly crowded market. As regulators continue to crack down on companies that fail to prioritize user protection, Block's settlement serves as a warning to other fintech companies to prioritize compliance and user safety.