Block settles with 46 states for $45 million over Cash App fraud probe

Fintech company Block has agreed to pay $45 million to settle allegations from 46 U.S. states that its peer-to-peer payments app, Cash App, did not adequately protect users from fraud. State attorneys general stated they found that Block misled users by falsely advertising that Cash App offered bank-like protections, including fraud detection.

Block has denied any wrongdoing. According to the states' allegations, Cash App allowed users to create accounts without a Social Security number or date of birth and did not limit the number of accounts per person, making it easier for scammers to exploit the platform. The states also alleged that the lack of an official customer support phone number led many locked-out users to fake customer service numbers operated by scammers.

This settlement follows earlier action by the Consumer Financial Protection Bureau (CFPB), which similarly accused Block of failing to investigate fraud claims and provide adequate customer service. That resulted in $175 million in penalties and redress for consumers.

Under the terms of the new settlement, Block will implement improvements to Cash App's fraud prevention measures and customer service, including the provision of live customer support for users of the mobile payment platform.