Attorney General John M. Formella announces 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, and failed to provide the fraud protection and resolution it promised and was required by law.

“Consumers deserve to know that when a financial services company promises to keep their money safe, it will stand behind those promises,” said Attorney General Formella. “This settlement holds Block accountable for failing to protect Cash App users from fraud and requires the company to strengthen its fraud prevention, customer support, and consumer reimbursement practices. As more people rely on digital payment platforms to manage their finances, companies must ensure they have the safeguards and customer protections necessary to protect consumers.”

Block told Cash App users their money was safe, implying the app offered protections similar to those provided by banks. At the same time, Block knew fraud on its platform was rising sharply and, rather than warning users or strengthening safeguards, continued aggressively marketing the service. For years, Block encouraged consumers to deposit paychecks and government benefits directly into Cash App, particularly targeting unbanked and underbanked consumers who often relied on the app as their primary financial account. As its user base grew, Block failed to ensure it had adequate systems and customer support in place to protect those consumers when problems arose.

The settlement was led by a bipartisan coalition of state attorneys general. The investigation found that several of Block’s business practices made fraud easier, including:

•    Block’s sign-up process was designed to be fast and frictionless, with limited identity verification, making it easy for fraudsters to create accounts.
•    For years, Cash App offered no live telephone customer support. Consumers who needed help often searched online for a customer service number and instead reached fake phone numbers operated by scammers posing as Cash App representatives. Those scammers then took over user accounts or stole money from consumers’ other financial accounts. Block knew this was occurring but did not warn users or establish live telephone customer support until years later.
•    Block promoted a social media campaign known as “Cash App Fridays,” encouraging users to publicly share their $cashtag for a chance to win weekly prizes. Fraudsters exploited the campaign by contacting users, falsely claiming they had won, and tricking them into providing their login credentials. Despite knowing about the scams, Block continued the promotion.

Block’s failures had significant consequences for consumers. Users whose accounts were automatically locked after suspicious activity often went weeks without access to their money. Victims of fraud frequently were unable to recover stolen funds because Block failed to promptly investigate unauthorized transactions or provide refunds when required by law.

Under the settlement, Block has agreed to implement and maintain practices designed to better protect consumers, including:

•    Maintaining customer support capable of resolving fraud complaints, account lockouts, and other customer issues.
•    Providing live customer support 24 hours a day, including a live representative by phone at least 13.5 hours each day and by online chat at least 18 hours each day.
•    Ending false or misleading claims about Cash App’s safety and fraud protections.
•    Discontinuing marketing practices known to increase fraud risks.
•    Providing consumers with education about common fraud schemes.
•    Fulfilling its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions.

Block has also agreed to pay $45 million to resolve the multistate coalition’s claims. New Hampshire’s share of the multistate settlement is $338,788.27.

The multistate settlement also reaffirms Block’s commitment to distribute between $75 million and $120 million to compensate consumers nationwide as part of a settlement with the Consumer Financial Protection Bureau (“CFPB”). Additional information regarding the CFPB’s settlement is available at: https://www.consumerfinance.gov/enforcement/actions/block-inc/ and https://cashappcfpbsettlement.com/.

The New Hampshire Department of Justice Consumer Protection and Antitrust Bureau investigates unfair, deceptive, or unreasonable practices involving New Hampshire consumers.  To file a complaint with the New Hampshire Department of Justice, visit https://www.doj.nh.gov/consumer/complaints.