Nationwide Coalition Secures $45 million Settlement with Cash App Owner Block Inc.

OAKLAND, Calif. (KEYT) – A coalition of 46 attorneys general were able to secure a $45 million settlement with Block Inc., the company that owns the peer-to-peer payment platform Cash App, over allegations of violating state and national consumer protection laws.

The settlement resolves allegations that Block Inc. violated California's Unfair Competition Law and False Advertising Law when the company misled customers about the financial protections they could expect when using Cash App and are required under state law shared the California Attorney General's Office in a press release Wednesday.

Under the terms of the settlement, California will receive $2,941,785.27 and Block Inc. is required to honor a previous settlement the Oakland-based company agreed to with the Consumer Financial Protection Bureau at the end of the Biden Administration.

The change in administration is notable.

The prior agreement required Block Inc. to pay at least $75 million and up to $120 million in additional relief to impacted customers.

During President Trump's Second Term, the federal watchdog has been functionally shut down and its budget and personnel have been unilaterally reduced without Congressional input, resulting in a coalition of 22 attorneys general filing a lawsuit challenging the decision and costing Americans an estimated $19 billion in 2025 alone a Senate Committee found.

"President Trump seems intent on making life more unaffordable for Americans — whether by withholding food assistance, pushing policies that would make energy more expensive, or by placing chaotic tariffs on essential items. At the same time, the Administration continues to abandon its responsibility to protect and defend American consumers being taken advantage of by Big Corporations, dismantling the agency that stands up for consumers against big banks, debt collectors, and credit reporting companies," argued California Attorney General Bonta, a member of the coalition opposing the closure of the Consumer Financial Protection Bureau (CFPB). "The Trump Administration's latest effort to destroy the CFPB means that hundreds of thousands of consumer complaints will fall on deaf ears. If you have ever had issues with your car loan, mortgage loans, or bank fees, if you have ever disputed a credit score error and expected to have the federal government on your side, this impacts you. By refusing to fund the CFPB, even when legal and appropriate funding mechanisms are available, the Trump Administration has sharpened its message that it does not care about affordability, that it does not care to be on the side of families and working Americans."

The Trump Administration didn't just try to close the federal watchdog, it actively terminated multiple prior settlements, letting parties found to have likely violated state and federal consumer protection laws avoid paying millions in relief to victims added Attorney General Bonta's Office.

Under the settlement, victims of Block Inc.'s actions can still use the Consumer Financial Protection Bureau to get their share of the prior settlement. More information for those impacted can be found here.

A multi-state investigation revealed that through at least 2021, Block's large-scale expansion of its Cash App user base was fueled in part by the company's minimal screening of new account sign ups even while the company was aware of and took actions that facilitated increasing fraud through the platform explained the complaint filed against the company.

Block Inc. told customers that it has "cutting edge...fraud detection technology" and its Terms of Service informed customers that they were using a financial application that would keep their money safe, even suggesting that balances on Cash App had the same protection as accounts at financial institutions including Federal Deposit Insurance Corporation (FDIC) coverage noted the complaint.

Unfortunately for its customers, Block Inc. did not have a consistent fraud detection program and instead focused on maximizing customer acquisitions, making the platform even less safe from fraud argued the complaint.

"With a Cash Card, your Cash balance is FDIC-insured through our partner banks, which means the federal government promises to protect it," stated the Cash App website from November 2022 to December 2023 noted the complaint.

According to the complaint, in December of 2023, Block Inc. moved that characterization to the "Security" page of the Cash App website and rewrote it to state, "Cash App protects millions of people’s payments each year. With a Cash App Card, your money is FDIC-Insured through our partner banks for up to $250,000 per person.*"

The complaint shared that the asterisk at the end of that statement linked to a fine print statement that explained, "Cash App is a financial services platform, not a bank. Banking services and FDIC Insurance provided by Cash App’s bank partner(s). With a Cash App Card, your funds are FDIC-insured through our partner banks, Wells Fargo Bank, N.A. and Sutton Bank, Members FDIC, for up to $250,000 per person."

"The primary purpose of these representations was to encourage new users to sign up for Cash App by assuring them that money in their Cash App account would be protected from loss the same way it would be protected if it were in a traditional bank account," detailed the complaint. "These representations are deceptive and misleading. FDIC pass-through insurance applies only if Cash App's partner bank fails—not Cash App itself."

Until 2021, Block Inc. did not provide live phone support for Cash App users despite publishing a customer-service phone number on Cash App debit cards and in its Terms of Service noted the complaint.

Instead, the company routed callers to a prerecorded message that required them to message customer service through the application and the company routinely took 24 to 48 hours to provide an initial response through the application explained the complaint.

Scammers took notice.

Fraudsters created fake Cash App webpages with fabricated 1-800 numbers claiming they led to Block Inc. customer service, but actually led to bad actors shared the complaint.

The complaint explained that once scammers had access to customer accounts through the fake customer service contacts, they could empty funds stored in the Cash App accounts and even transfer money from the customer's linked bank account or debit card.

Block Inc. was aware as early as October of 2018 that it did not have a live support program despite its public claims and was aware the most common form of fraud on the app was account takovers through fake customer support contacts added the complaint.

The company also ran a social media campaign asking customers to publicly post their unique Cash App identifier, known as their $cashtag, for a chance to win a weekly prize noted the complaint.

Scammers used that information to identify and contact customers, claimed they had won that week's prize, and ultimately gained access to accounts after customers shared their login details explained the complaint.

According to the complaint, Block Inc. knew about the scams based on the Cash App Friday social media promotion and still ran the promotion for years.

Under the conditions of the settlement, Block Inc. is legally required to:

• Maintain a customer support system that can resolve fraud complaints, account lockouts, and other issues
• Offer live support 24 hours a day with a human available for 13.5 hours a day and a live chat available for at least 18 hours a day
• Stop making false claims about Cash App's safety and protection from fraud
• Stop marketing practices that are known to increase fraud on the platform
• Educate consumers about types of fraud they may encounter when using Cash App
• Fulfill its prior legal obligations to reimburse users for unauthorized transactions and investigate fraud claims

"Block told Cash App customers that their money was just as safe and secure as in a bank — which is not true — and then left its customers high and dry when things went wrong. Consumers were stranded: unable to access their money, vulnerable to scammers, and without any recourse or even a phone number to call when they found themselves victims of fraud," explained California's Attorney General Rob Bonta. "Our settlement today requires Block to immediately cease making misrepresentations, alert consumers of fraud, and provide customer service support to ensure consumers have someone to call when things go wrong. Importantly, today's settlement ensures Block can't go back on its already-brokered promise to the Biden Administration to provide redress to consumers it harmed."