Attorney General Rayfield Announces $45 Million Multistate Settlement with Block Inc. Over Deceptive Practices on Cash App

Attorney General Dan Rayfield today announced a $45 million multistate settlement with Block, Inc., the company behind the popular peer-to-peer payments app Cash App. The settlement resolves allegations that Block misled consumers about the safety of Cash App, failed to protect users from fraud on the platform, and didn't provide the fraud protection and resolution that it promised and that was required by law. In short, the company failed to help people when things went wrong.

Oregon led the investigation along with Texas, securing meaningful relief for all 46 participating states. Oregon will receive $3 million from the settlement and will continue to monitor and ensure that Block carries out its obligation under its separate settlement with the CFPB to pay at least $75 million in consumer restitution.

"Cash App told people their money was safe, and millions of Oregonians and Americans believed them, including a lot of people who didn't have other options" said Attorney General Rayfield. "When things went wrong, Block left them with nowhere to turn. This settlement holds Block accountable and makes sure they can't walk away from money they promised to pay back to consumers."

Block told Cash App users their money was safe - implying that the app worked like a bank, with the same protections, which wasn't true. At the same time, Block knew fraud on its platform was rising sharply - and instead of warning users or strengthening protections, it doubled down on marketing.

For years, Block actively promoted direct deposits of paychecks and government benefits into Cash App. It made a particular push to reach unbanked and underbanked consumers - people who would often rely on Cash App as their primary financial account, and who were especially vulnerable to fraud. Block grew its user base without making sure it could support those users when problems arose.

Block's policies didn't just fail to stop fraud - in several ways they made it easier:

• Block's sign-up process was designed to be fast and frictionless, with minimal identity verification. That made it easy for fraudsters to create accounts, not just legitimate users.
• For years, Cash App had no phone support. Users who needed help could only message through the app or on social media. People who got locked out - or just wanted to talk to someone - searched online for a phone number and often ended up calling fake 1-800 numbers run by scammers posing as Cash App. Those scammers would then take over accounts or drain users' other financial accounts. Block knew this was happening and didn't warn users or set up a real phone line until years later.
• Block ran a social media promotion called Cash App Fridays, encouraging users to publicly post their $cashtag - a unique Cash App identifier - for a chance to win a weekly prize. Fraudsters would then contact those users, tell them they'd won, and trick them into handing over their login information. Block knew about these scams and kept running the promotion anyway, for years.

Block's failure to provide adequate customer service and to fulfill its promise to protect users from fraud had real consequences for real people. Innocent users who experience automated account locks for suspicious transactions were frequently locked out of their accounts for weeks without a way to access their money. Victims of fraud through the app were often left with no recourse, because delays made it impossible to get stolen money back from scammers and because Block failed to investigate unauthorized transactions and failed to issue refunds when required by law.

Under the settlement, Block has agreed to implement and maintain responsible practices to resolve these issues, including to:

• Maintain customer support that can resolve fraud complaints, account lockouts, and other problems.
• Offer live phone support 24 hours a day, with a human available by phone at least 13.5 hours a day and by live chat at least 18 hours a day.
• Stop making false or misleading claims about Cash App's safety and how it protects users from fraud.
• Discontinue marketing practices known to increase fraud on the platform.
• Directly educate consumers about common types of fraud.
• Fulfill its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions.

The settlement also ensures restitution will be paid as Block previously promised. Prior to the change in administration last year, the CFPB resolved its investigation related to Cash App for similar conduct. That settlement included restitution to consumers nationwide of between $75 million and $120 million. Under the new administration, the CFPB has cancelled several settlements, including at least two in which restitution had not yet been paid. Consequently, the multistate agreement ensures that if Block fails to pay the restitution it promised under the CFPB settlement, that obligation will be absorbed into Oregon's settlement and enforced by the multistate executive committee. Additional information regarding the CFPB's settlement is available at:

https://www.consumerfinance.gov/enforcement/actions/block-inc/ and https://cashappcfpbsettlement.com/