The company behind Cash App will pay $45 million and change its fraud protection practices under a multistate settlement announced by New York Attorney General Letitia James.
James and a bipartisan coalition of 45 other attorneys general said Block, the company that operates Cash App, misled users about the platform's safety, failed to provide promised fraud protection and did not adequately help users who were scammed.
The settlement requires Block to strengthen customer support, stop misleading marketing and improve how it handles fraud complaints and unauthorized transactions. New York will receive $1.6 million in penalties.
According to James' office, Block advertised Cash App in ways that falsely suggested it operated like a bank and provided similar protections for customer funds. The company also claimed it had advanced fraud detection technology while lacking a consistent fraud detection system, the attorney general's office said.
Investigators said Block knew fraud on the platform was rising but continued marketing efforts that expanded the user base without adequate safeguards.
The attorney general's office said Cash App accounts did not require a Social Security number or date of birth to create, and there was no limit on how many accounts one person could open. Those gaps allowed bad actors to operate networks of scam accounts, according to the release.
James' office also said Cash App users who searched online for a customer service number sometimes found fake numbers operated by scammers because Block did not provide a real phone support line until 2021.
Under the settlement, Block must provide support services capable of resolving fraud complaints, account lockouts and other problems. The company must offer live support around the clock, with phone support from a real person for at least 13.5 hours per day and live chat for at least 18 hours per day.
Block must also stop false or misleading claims about Cash App's safety, discontinue marketing practices known to increase fraud, educate consumers about common scams, investigate fraud claims and reimburse users for unauthorized transactions when required by law.
James said Cash App users lost money to costly scams for years while Block failed to protect them.
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