Block Resolves $45M Cash App Fraud Investigation with 46 States

Block has agreed to pay $45 million to settle claims from 46 U.S. states, which allege that its peer-to-peer payment app, Cash App, failed to adequately safeguard users against fraud.

State attorneys general have revealed that Block misrepresented Cash App by falsely stating it provided bank-like protections, including advanced fraud detection. Block has denied any wrongdoing in this matter.

The states asserted that Cash App allowed users to create accounts without providing a Social Security number or date of birth and imposed no restrictions on the number of accounts that one person could establish, thereby enabling scams. Additionally, they claimed that Cash App’s lack of an official customer support phone number forced many users, who found themselves locked out of their accounts, to resort to fraudulent customer service numbers run by scammers.

As more Americans turn to fintech applications for their primary banking needs, regulatory scrutiny has intensified. Block’s settlement is the latest chapter in the ongoing review of Cash App’s business practices by regulators. This follows prior actions from the Consumer Financial Protection Bureau, which similarly accused Block of failing to investigate fraud claims and not providing adequate customer service, leading to $175 million in penalties and restitution for consumers.

Under the terms of the new settlement, Block will improve Cash App’s fraud prevention measures and customer service, including the introduction of live customer support for users of the mobile payment platform.

Reuters initially reported the settlement news. Block has not yet responded to TechCrunch’s request for comment.