A bipartisan coalition of 46 state attorneys general has reached a $45 million settlement with Block, Inc., the parent company of Cash App, resolving allegations that the company misled consumers about the safety of the peer-to-peer payment platform and failed to provide required fraud protections and dispute resolution.
The settlement, led by Oregon and Texas, is the latest example of state attorneys general coordinating enforcement against financial technology companies whose products increasingly resemble bank accounts for consumers but do not always provide the same protections, customer service infrastructure, or fraud controls. The agreement also reinforces state-level scrutiny of how companies market financial products to unbanked and underbanked consumers, a population that regulators said Cash App targeted through direct deposit promotions for paychecks and government benefits.
The states alleged that Block told consumers their money was safe on Cash App, implying that the app offered protections similar to a bank account. Regulators said those representations were misleading because Block knew fraud on the platform was increasing and did not adequately warn users, strengthen safeguards, or provide effective support when consumers lost access to accounts or reported unauthorized transactions.
According to the states, Block’s practices created multiple fraud risks. Cash App’s sign-up process emphasized speed and ease of use, with limited identity verification, allowing fraudsters to create accounts with little friction. For years, the platform also lacked live phone support, leaving users to seek help through the app or social media. Consumers searching online for customer service numbers often reached fake 1-800 numbers operated by scammers posing as Cash App representatives, who then took over accounts or drained other financial accounts.
The states also highlighted Cash App Fridays, a social media promotion that encouraged users to publicly post their $cashtag for a chance to win prizes. Regulators said fraudsters used those posts to target users with fake prize notifications and account takeover scams, while Block continued the promotion despite knowing about the risk.
Under the settlement, Block must maintain customer support capable of resolving fraud complaints, account lockouts, and other problems. The company also agreed to provide live 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. It must stop making false or misleading claims about Cash App’s safety, discontinue marketing practices known to increase fraud, educate consumers about common scams, investigate fraud claims, and reimburse users for unauthorized transactions when required by law.
The state settlement also preserves Block’s obligation under a prior Consumer Financial Protection Bureau settlement to pay between $75 million and $120 million in consumer redress nationwide. Several attorneys general framed that provision as a state backstop to ensure consumers receive restitution regardless of shifts in federal enforcement priorities.
