Cash App Owner Reaches $45 million Settlement With PA, Other States

Pennsylvania’s attorney general has reached a $45 million multistate settlement with the company behind the popular Cash App product to resolve allegations that the company misled consumers.

The settlement addresses claims that Cash App owner Block Inc. failed to deliver the fraud protection and dispute-resolution services it promised and was legally required to provide.

According to the attorney general’s office, Block assured Cash App users their funds were secure, implying the app maintained protections comparable to traditional banking institutions. However, authorities alleged that Block knew fraud on the platform was rising sharply but continued to aggressively market its services without strengthening safeguards or warning consumers.

Under the terms of a consent petition filed in the Philadelphia Court of Common Pleas, Pennsylvania will receive $1,137,695.72 from the settlement to fund future public protection and educational initiatives.

The agreement is currently pending Philadelphia Court of Common Pleas approval.

For years, Block actively encouraged the direct deposit of paychecks and government benefits into Cash App. The marketing specifically targeted unbanked and underbanked consumers who frequently relied on the app as their primary financial account. State officials alleged that Block expanded its user base without ensuring it had the infrastructure to support those customers when issues arose.

The attorney general’s office said Block designed a fast registration process with minimal identity verification, which allowed fraudsters to easily set up accounts alongside legitimate users.

Cash App first offered no phone support, which made users to seek help via the app or social media. Locked-out users searching online for assistance frequently dialed fraudulent 1-800 numbers operated by scammers posing as Cash App representatives, leading to account takeovers and drained funds. Block was aware of these scams but delayed establishing a legitimate phone line or warning users, the attorney general’s office said.

In addition, Block ran a weekly social media promotion called “Cash App Fridays,” prompting users to publicly share their “$cashtag” identifiers to win prizes. Fraudsters targeted these users, falsely claiming they won to trick them into surrendering login credentials. Block allegedly continued the promotion for years despite knowing about the scheme, authorities said.

The attorney general’s office stated that Block’s lack of customer service had consequences. Automated security locks for suspicious activity frequently blocked users from their money for weeks. Fraud victims were often left without recourse because Block failed to investigate unauthorized transactions and issue legally mandated refunds in a timely manner.

As part of the settlement, Block agreed to alter its business practices by maintaining customer support capable of handling fraud complaints and account lockouts. The company must provide 24-hour live support, featuring a human representative available by phone for at least 13.5 hours a day and via live chat for at least 18 hours a day.

Block must also stop making misleading claims regarding app safety, end marketing practices known to drive fraud, directly educate consumers on common scams, and fulfill its legal requirements to investigate fraud and reimburse unauthorized transactions.

The agreement also reaffirms Block’s commitment to distribute between $75 million and $120 million to compensate consumers nationwide under a separate settlement with the Consumer Financial Protection Bureau.

“CashApp knew peer-to-peer payment apps were prime targets for fraudsters, and instead of taking extra steps to safeguard their platform, they misled and deceived consumers about protections being offered,” Pennsylvania Attorney General Dave Sunday said in a statement. “The changes required under this settlement will strengthen consumer protections and improve the ability of users to report and resolve fraud.”