HARRISBURG, Pa. — Attorney General Dave Sunday announced a $45 million multistate settlement with Block, Inc., the owner of the popular peer-to-peer payments app Cash App.
The settlement addresses allegations that Block misled consumers about the safety of Cash App and failed to protect users from fraud on its platform.
Block, Inc. allegedly told Cash App users their money was safe, implying the platform offered protections similar to those provided by traditional banks. At the same time, the company reportedly knew that fraud on its platform was significantly increasing. Instead of warning its users or strengthening protections, Block continued to aggressively market its services.
The Commonwealth of Pennsylvania will receive $1,137,695.72 from the settlement. This money is designated for future public protection and educational purposes.
Attorney General Dave Sunday criticized Cash App’s conduct. “CashApp knew peer-to-peer payment apps were prime targets for fraudsters and instead of taking extra steps to safeguard their platform, they misled and deceived consumers about protections being offered,” Sunday said. “The changes required under this settlement will strengthen consumer protections and improve the ability of users to report and resolve fraud.”
For years, Block actively promoted direct deposits of paychecks and government benefits into Cash App. This strategy particularly targeted unbanked and underbanked consumers who often relied on Cash App as their primary financial account. According to the states involved in the settlement, Block expanded its user base without ensuring it could adequately support users when problems arose.
Several shortcomings were identified within Cash App’s operations. Block’s sign-up process was designed to be fast and frictionless, with minimal identity verification, which facilitated the creation of accounts by fraudsters.
For an extended period, Cash App lacked phone support, leaving users with only in-app or social media messaging for assistance. Individuals locked out of their accounts often called fake 1-800 numbers run by scammers, leading to account takeovers or drained financial accounts. Block was aware of these scams but did not warn users or establish a direct phone line until years later.
Block also ran a social media promotion called Cash App Fridays, encouraging users to publicly post their $cashtag for a chance to win a weekly prize. Fraudsters exploited this by contacting users, falsely claiming they had won and tricking them into providing login information. Block reportedly knew about these scams but continued the promotion for years.
Block’s failure to provide adequate customer service and protect users resulted in significant issues for individuals. Users experiencing automated account locks for suspicious transactions were frequently unable to access their money for weeks. Victims of fraud often had no recourse because delays made it impossible to recover stolen funds due to Block’s failure to investigate unauthorized transactions and issue legally required refunds.
Under the terms of the settlement, Block has agreed to implement and maintain responsible practices to address these issues. These include maintaining customer support capable of resolving fraud complaints, account lockouts and other problems. Block will also offer live support 24 hours a day, with a human available by phone for at least 13.5 hours daily and by live chat for at least 18 hours daily.
Block is further required to stop making false or misleading claims about Cash App’s safety and how it protects users from fraud. The company must also discontinue marketing practices known to increase fraud on the platform. Additionally, Block will directly educate consumers about common types of fraud and fulfill its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions.
The multistate settlement also reaffirms Block’s commitment to distribute between $75 million and $120 million to compensate consumers nationwide as part of a separate settlement with the Consumer Financial Protection Bureau.
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