Block Agrees to $45 Million Multistate Settlement Over Cash App Fraud Failures #

Block, the payments company chaired by Jack Dorsey, has agreed to pay $45 million to settle fraud-related claims brought by 46 US states.

The settlement, announced on July 8, centres on allegations that Cash App, Block’s peer-to-peer payments platform with roughly 59 million active users, failed to adequately protect customers from fraud and misled them about the level of security the app offered. According to state regulators, Block falsely implied that Cash App provided bank-like protections and that user balances were FDIC-insured, when that protection would only apply in the event that a partner bank failed.

Investigators, led by the attorneys general of Texas and Oregon, also found that Cash App allowed users to open accounts without providing a Social Security number or date of birth, and placed no limit on the number of accounts a single person could create, conditions regulators said made the platform easier for fraudsters to exploit. A further concern involved customer support: because Cash App did not offer an official support phone number for most of its history, users locked out of their accounts frequently turned to fake helplines run by scammers.

Under the terms of the settlement, Block must build a comprehensive compliance management system, stop overstating its fraud protections, maintain live phone support for a minimum of 13.5 hours a day, and respond to complaints about unauthorised transactions within three business days. The $45 million will be divided among the 46 participating states; Texas is due $5 million, Oregon $3 million, and New York approximately $1.6 million.

Block did not admit wrongdoing, describing the resolution as entered “solely for the purpose of concluding this matter.” A spokesperson characterised the case as “a previously disclosed legacy matter that primarily relates to historical aspects of our business,” pointing to investments the company has since made in consumer protection, customer service, and compliance.

The settlement follows two earlier regulatory actions against Cash App. In January 2025, the Consumer Financial Protection Bureau ordered Block to pay $175 million, comprising $120 million in customer redress and a $55 million fine, over broadly similar failures. A separate multistate settlement in early 2025 saw Block pay $80 million over anti-money-laundering compliance shortfalls.

Todd Baker, a senior fellow at Columbia University’s business and law schools, said the allegations around fraud risk disclosure and fraud prevention closely mirror those facing Zelle operator Early Warning Services, currently being pursued by New York Attorney General Letitia James. “The large settlement with Cash App makes a negotiated settlement with Zelle more likely,” Baker said.

Source: The Next Web