Block settles Cash App case with 46 US states for $45m

Block has reached a $45m settlement with 46 US states over allegations that Cash App did not adequately guard users against fraud.

As part of the deal, the company will also introduce live customer support for the mobile payments platform.

The case stems from a multistate investigation by attorneys general into Cash App’s fraud prevention and customer service practices.

State officials alleged that Block’s marketing gave users the impression that Cash App provided bank-like protections, including highly effective fraud monitoring.

The company rejected the allegations and said it had done nothing wrong.

The states also argued that, even as fraud rose sharply in recent years, Block focused on promoting the service instead of tightening its safeguards.

They said users were able to set up Cash App accounts without providing a Social Security number or date of birth. They also said people could open as many accounts as they wanted, which, according to the states, increased the risk of scams.

Another issue highlighted by investigators was the absence of a customer service phone number.

They said some users who were unable to access their accounts ended up seeking help through fake support numbers controlled by scammers.

Under the terms of the settlement, Block has agreed to make changes to both its fraud prevention systems and its customer service operations.

Those changes include offering support throughout the day and night, with live phone representatives available for at least 13.5 hours each day.

In a separate matter, Washington Attorney General Nick Brown said Block had agreed to pay $20m to settle the state’s lawsuit over fraudulent unemployment benefit payments made during the Covid-19 pandemic.

According to Brown’s office, Cash App processed at least $22m in unemployment payments over a five-month span in 2020 that had been obtained fraudulently using stolen personal details belonging to Washington residents.

The office said Block did not keep sufficient anti-fraud measures in place. Block denied wrongdoing in a court filing.

In comments to Reuters, Block said the multistate agreement “resolves a ⁠previously disclosed legacy matter that primarily relates to historical aspects of our business.”

The company added that Cash App had invested heavily in customer protection, support 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,” the company said.

The settlement covers every US state apart from Hawaii, Missouri, South Carolina and Wyoming.