HARRISBURG, DAUPHIN CO. (WOLF) — Pennsylvania will receive more than $1.1 million as part of a $45 million multistate settlement with Block Inc., the owner of Cash App, over allegations the company failed to adequately protect users from fraud and misled consumers about the safety of its platform.
Attorney General Dave Sunday announced Wednesday that the settlement resolves allegations that Block failed to provide the fraud protections and dispute-resolution services it promised users and was legally required to offer.
According to the Attorney General’s Office, Cash App marketed itself as a secure alternative to traditional banking while allegedly failing to keep pace with growing fraud on the platform.
“Cash App knew peer-to-peer payment apps were prime targets for fraudsters, and instead of taking extra steps to safeguard their platform, they misled and deceived consumers about protections being offered,” Sunday said. “The changes required under this settlement will strengthen consumer protections and improve the ability of users to report and resolve fraud.”
Under the agreement, Pennsylvania will receive $1,137,695.72, which will be used for future consumer protection and public education efforts.
Investigators alleged Block targeted consumers who did not have traditional bank accounts by encouraging them to deposit paychecks and government benefits into Cash App, while failing to provide adequate customer support when problems occurred.
The settlement outlines several alleged shortcomings, including:
Allowing users to create accounts with minimal identity verification, making it easier for fraudsters to open accounts.
Failing for years to provide customer phone support, leaving users vulnerable to fake customer service phone numbers operated by scammers.
Continuing a social media promotion known as “Cash App Fridays,” despite knowing scammers were using it to trick users into revealing login credentials.
Delaying fraud investigations and, in some cases, failing to reimburse users for unauthorized transactions as required by law.
As part of the settlement, Block has agreed to make several changes, including:
Maintaining customer support to resolve fraud complaints and account lockouts.
Providing 24-hour customer support, including live phone assistance for at least 13.5 hours a day and live chat for at least 18 hours a day.
Stopping misleading statements about Cash App’s security and fraud protections.
Ending marketing practices that increase the risk of fraud.
Educating users about common scams.
Meeting its legal obligations to investigate fraud claims and reimburse customers for unauthorized transactions.
The agreement also reaffirms Block’s commitment under a separate settlement with the Consumer Financial Protection Bureau to distribute between $75 million and $120 million to consumers nationwide.
The settlement filed by the Pennsylvania Attorney General’s Office is awaiting approval in the Philadelphia County Court of Common Pleas.