Cash App parent settles states' probe over fraud protections for $45 million

Block

08/07/2026 21:25

By Daniel Wiessner

    July 8 (Reuters) - Block XYZ.N has agreed to pay $45 million and offer live customer support for its mobile payment service, Cash App, to settle claims by 46 U.S. states that the company failed to protect users from fraud, officials said on Wednesday.
State attorneys general involved in the investigation said they had found that Block misled users with advertising that falsely implied that Cash App offered protections akin to a bank including cutting-edge fraud detection. Block denied wrongdoing.
The states claim the company also responded to a sharp increase in fraud in recent years by expanding marketing rather than strengthening protections. Cash App accounts could be created without a Social Security number or date of birth, and users could open unlimited accounts, enabling scams, they said.
And because Cash App had no support phone number, many locked-out users turned to fake customer service numbers run by scammers, the states claim.
Under the settlement, Block will overhaul its customer service and fraud protections, including offering 24-hour support with live phone agents available at least 13.5 hours daily. 
Washington Attorney General Nick Brown, a Democrat, said on Wednesday that Block had separately agreed to a $20 million settlement in the state's lawsuit claiming the company facilitated fraudulent unemployment insurance payments during the COVID-19 pandemic. 
Brown's office said that over a five-month period in 2020, Cash App processed at least $22 million in unemployment benefits that were fraudulently obtained by people who used the stolen personal information of Washington residents, and that Block failed to maintain anti-fraud controls. Block denied wrongdoing in a court filing. 
Block in a statement provided by a spokesperson said the multistate settlement "resolves a previously disclosed legacy matter that primarily relates to historical aspects of our business." The company said that Cash App has made significant investments in consumer protection, customer service and compliance. 
"We share the commitment of the attorneys general to addressing industry challenges and continue to invest in operations and technology to promote a safe and healthy financial ecosystem," the company said. 
Every U.S. state is involved in the settlement except for Hawaii, Missouri, South Carolina and Wyoming.
Block last year agreed to pay up to $120 million, including $40 million to New York, to settle claims by a similar coalition of states that Cash App had not sufficiently protected against money laundering. The company denied wrongdoing. 

(Reporting by Daniel Wiessner in Albany, New York)