MADISON, Wis. — Wisconsin will receive more than $650,000 as part of a $45 million multistate settlement with Block Inc., the company behind Cash App, over allegations it failed to protect users from fraud and misled consumers about the app’s security.
The settlement, announced Wednesday by the Wisconsin Department of Justice and a coalition of 45 other states, resolves allegations that Block falsely suggested Cash App offered protections similar to those provided by banks while failing to adequately prevent fraud or help customers recover lost funds.
Attorney General Josh Kaul said consumers deserve accurate information about how their money is protected.
“Consumers who entrust a company with their money should be provided with a clear picture of how safe their money will be,” Kaul said. “Companies that take responsibility for people’s money must not mislead their users or customers about the strength of their consumer protections.”
According to the settlement, regulators alleged Block allowed fraud to flourish by using minimal identity verification for new accounts, failing to provide live customer support for years, and continuing marketing campaigns that scammers exploited to steal users’ account information.
The company also allegedly failed to properly investigate fraud complaints and reimburse customers for unauthorized transactions as required by law.
Under the agreement, Block must improve its fraud prevention efforts, maintain expanded live customer support, educate users about common scams, stop making misleading claims about Cash App’s security, and comply with federal requirements for investigating fraud and refunding unauthorized transactions.
In addition to the payments to states, Block has also agreed to distribute between $75 million and $120 million to compensate consumers nationwide under a separate agreement with the Consumer Financial Protection Bureau.
