Millions of Americans use Cash App to send and receive money daily. On Thursday, Alabama Attorney General Steve Marshall announced the state has joined a $45 million multi-state settlement with Block Inc., the app’s parent company, resolving allegations it misled consumers about security and failed to adequately protect users from fraud.
Alabama will receive $595,421 under the agreement.
According to the Attorney General’s Office, the settlement resolves allegations that Block misled consumers about Cash App’s safety, failed to protect users from fraud and did not provide the fraud protection and resolution it promised or that was required by law.
The office also alleged the company led users to believe Cash App offered protections similar to those provided by banks when that was not the case.
“We have long advised consumers to use caution when using peer-to-peer programs for payments. This settlement sends a clear message that companies offering these services must be transparent, secure, and accountable,” Marshall said. “Our office will continue to hold bad actors responsible and fight to ensure that consumers are protected in the digital marketplace.”
According to the Attorney General’s Office, Block encouraged consumers to use Cash App to receive direct deposits of paychecks and government benefits, with a particular focus on unbanked and underbanked customers who often relied on the app as their primary financial account.
Investigators alleged the company knew fraud on the platform was increasing but, rather than warning users or strengthening protections, doubled down on marketing.
According to the settlement, investigators found several company practices allegedly made fraud easier. The Attorney General’s Office said Cash App’s account sign-up process required minimal identity verification, making it easier for fraudsters to create accounts.
For years, users who needed help could only contact the company through the app or on social media because Cash App did not offer telephone customer support. The release states many users searching online for a customer service number instead reached scammers posing as Cash App representatives.
Investigators also alleged Block continued running its “Cash App Fridays” social media promotion despite knowing scammers were exploiting the campaign by impersonating the company, falsely telling users they had won prizes and convincing them to provide their login credentials.
The Attorney General’s Office said those practices left some users locked out of their accounts for weeks without access to their money. It also alleged many fraud victims were unable to recover stolen funds because claims were delayed, unauthorized transactions were not properly investigated and refunds were not issued when required by law.
Under the settlement, Block has agreed to improve customer support, provide expanded live phone and chat assistance, stop making false or misleading claims about Cash App’s safety, discontinue marketing practices known to increase fraud, educate consumers about common scams, and fulfill its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions when required by law.
The investigation was led by the attorneys general of Oregon and Texas and included 46 participating states.
Sherri Blevins is a staff writer for Yellowhammer News. You may contact her at [email protected].
