Cash App Ordered to Pay $175 Million For Putting Users at Risk

On January 16, 2025, the Consumer Financial Protection Bureau ordered Block, the operator of Cash App, to pay consumers up to $120 million and pay a penalty of $55 million for failing to employ adequate security protocols and putting millions of users at risk.

Cash App is one of the largest peer-to-peer payment platforms in the United States, with more than 56 million accounts.  It allows consumers to link their bank account, send/receive electronic money transfers, and accept direct deposits. 

The Electronic Fund Transfer Act generally requires that peer-to-peer platforms, like Cash App, investigate disputes of unauthorized transactions.  Cash App allegedly failed to conduct these investigations or provide refunds to users who reported unauthorized transactions.  Instead, the platform directed users to contact their bank.  When Cash App did conduct its own investigations, it used “intentionally shoddy” practices to close reports of unauthorized transactions in the platform’s favor.

Block is also accused of making it unnecessarily difficult for Cash App users to contact customer service. For years, Block included a telephone number on the back of its Cash Card and in its Cash App Terms of service which did not connect to any type of customer support.  Instead, it led to a pre-recorded message directing users to contact customer support through the app.  Users who attempted to locate customer service contact information through internet searches were often directed to fraudsters posing as Cash App representatives, who tricked them into disclosing passwords and other sensitive information.  Block allegedly knew its users were being targeted by fraudsters in this manner but failed to timely address the problem.