A Cash App fraud settlement worth $45 million has been secured by a bipartisan coalition of attorneys general from 46 states, led by New York Attorney General Letitia James, over what regulators described as years of deceptive practices and inadequate consumer protections on Block’s mobile payments platform.
Block denied wrongdoing. The company, which operates Cash App, did not respond to requests for comment.
Unbanked Users Left Exposed
The states’ case centred on a specific vulnerability: Cash App had actively marketed itself to unbanked and underbanked consumers, encouraging direct deposits of paychecks and government benefits into the platform, according to the Alabama Attorney General’s office.
Those users, who often relied on Cash App as their primary financial account, were also the most exposed to fraud.
The platform’s account-opening process required neither a Social Security number nor a date of birth, and placed no limits on how many accounts a single person could create. For scammers, that combination was an open door.
The customer service problem compounded the harm. Cash App did not provide a functioning support phone number, leaving locked-out users to search online, where fake customer service lines operated by scammers were waiting. The Consumer Financial Protection Bureau (CFPB) found that although a telephone number appeared in Cash App’s terms of service and on the back of its cash card, that number did not connect consumers to any support at all.
The CFPB also found that Cash App’s terms of service led users to believe that transaction disputes were their linked bank’s responsibility, not Block’s, further insulating the company from accountability when fraud occurred.
What the Cash App Fraud Settlement Requires
Under the multistate agreement, Block must halt all misleading marketing related to Cash App and implement substantive operational changes, including live customer support agents and improved fraud-prevention systems, according to the New York Attorney General’s announcement.
The settlement arrives on top of a separate federal action. The CFPB’s consent order, issued on 16 January 2025, required Block to pay up to $120 million in consumer redress and a $55 million civil penalty into the CFPB’s victims relief fund, totalling the $175 million figure cited by the bureau, according to the CFPB’s newsroom.
The federal regulator had accused Block of using the card-network chargeback process as a substitute for its legal obligations under the Electronic Fund Transfer Act to investigate and resolve unauthorised transaction disputes. Oregon, one of the 46 participating states, will receive $3 million from the multistate fund and will separately monitor Block’s compliance with the CFPB order’s requirement to pay at least $75 million in consumer restitution, according to the Oregon Department of Justice.
Cash App is one of the largest peer-to-peer payment platforms in the United States, with more than 56 million accounts, according to the CFPB. That scale has increasingly attracted regulatory attention as fintech companies absorb roles once held by traditional banks, without always adopting equivalent consumer protections.
Block’s successive run-ins with both state and federal regulators over the same platform and the same core failures suggest that the compliance remediation now required under the multistate settlement will face close scrutiny from attorneys general who have already put Block on formal notice once before.
