Block, the parent company of Cash App, has agreed to pay $45 million and overhaul its customer service to settle claims that it failed to protect users from fraud. The deal, which covers 46 U.S. states, was reported by Reuters on Wednesday. Block denied any wrongdoing.
State attorneys general said their investigation found that Block advertised Cash App as having bank-like protections, including strong fraud detection, when it did not. They also alleged that as fraud on the platform increased in recent years, the company responded by expanding marketing rather than tightening security.
The settlement is the latest in a string of legal actions against Block over how it runs Cash App, and it signals growing pressure from state regulators on fintech companies to match the consumer protections that traditional banks are required to offer.
According to the attorneys general involved, the problems ran deep. Cash App allowed accounts to be created without a Social Security number or date of birth, and users could open unlimited accounts. That made it easy for scammers to operate. The app also had no customer support phone number, which pushed locked-out users toward fake support lines run by fraudsters.
Under the terms of the settlement, Block must make significant changes to how Cash App operates, including:
- Offering 24-hour customer support
- Making live phone agents available at least 13.5 hours per day
- Strengthening fraud detection and consumer protection systems
In a statement, Block said the settlement “resolves a previously disclosed legacy matter that primarily relates to historical aspects of our business.” The company said Cash App has already made “significant investments” in consumer protection, customer service, and compliance. “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,” Block said.
The multistate settlement does not include Hawaii, Missouri, South Carolina, or Wyoming.
On the same day, Washington Attorney General Nick Brown announced a separate $20 million settlement with Block over claims that Cash App processed fraudulent unemployment insurance payments during the COVID-19 pandemic. Washington’s office said that over a five-month period in 2020, Cash App handled at least $22 million in unemployment benefits fraudulently obtained using the stolen personal information of Washington state residents. Block denied wrongdoing in that case as well.
This is not Block’s first major settlement. Last year, the company agreed to pay up to $120 million, including $40 million to New York, to resolve claims from a similar coalition of states that Cash App had not done enough to prevent money laundering. Block denied wrongdoing in that case too.
The pattern matters. Block is now settling its second large multistate action in roughly 12 months, and the total exposure across these deals is climbing well past $150 million. For a company that built its brand on making money transfers fast and simple, the repeated findings from state regulators suggest that speed and simplicity came at a real cost to user safety. Regulators across the country appear to be drawing a clear line: convenience is not an excuse for weak consumer protections.