BOSTON – Massachusetts Attorney General Andrea Joy Campbell announced on Wednesday, July 8, that Massachusetts will receive $730,000 as part of a $45 million multi-state settlement with Bl0ck Inc., the maker of Cash App.
The settlement includes 46 states and the District of Columbia. Only Hawaii, Missouri, South Carolina, and Wyoming are not part of the settlement.
The settlement resolves allegations by the state that the company:
- misled consumers about the safety of Cash App;
- failed to protect users from fraud on the platform; and
- failed to provide the fraud protection and resolution that it promised and that was required by law.
“Companies that advertise the safety and security of their platforms have an obligation to deliver on those promises. Instead, Cash App enabled fraud by failing to take necessary security measures and running promotions that put users at risk,” said Campbell. “This settlement ensures Cash App will strengthen protections for users, implement responsible practices, and provide real, responsive customer service.”
According to Campbell’s office, Block told Cash App users that their money was safe, implying the app worked like a bank with the same protections, while it knew fraud on its platform was sharply on the rise. Instead of warning users, the company doubled down its marketing efforts. The company also actively promoted the direct deposit of paychecks into the app by users and targeted those not using a bank in its marketing efforts.
Campbell’s office also alleged that Block policies failed to stop fraud and made it easier for fraudulent actors by:
- Maintaining an enrollment process with minimal identity verification, making it easier for fraudulent actors to create accounts;
- Running a social media campaign encouraging users to post their unique identifier for the app to win prizes, enabling fraudulent actors to contact those users;
- Maintaining no phone support for years and only allowing support through messaging in the app or on social media.
The lack of phone support led to some users being locked out of Cash App for long durations without access to the funds in their account for suspicious transactions. Maintaining no phone support also enabled fraudulent actors to post 1-800 numbers online that users would find when searching for a way to contact the company.
The settlement requires Block to resolve these issues by:
- Maintain customer support that can resolve fraud complaints, account lockouts, and other problems.
- Offer live support 24 hours a day, with a human available by phone at least 13.5 hours a day and by live chat at least 18 hours a day.
- Stop making false or misleading claims about Cash App’s safety and how it protects users from fraud.
- Discontinue marketing practices known to increase fraud on the platform.
- Directly educate consumers about common types of fraud.
- Fulfill its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions.
The settlement also reaffirms Block’s commitment to the U.S. Consumer Financial Protection Bureau to distribute $75 million to $120 million to consumers nationwide as part of a previous settlement.
