HARRISBURG, PA — Block Inc. will pay Pennsylvania more than $1.1 million as part of a $45 million multistate settlement resolving allegations that the Cash App owner misled users about fraud protections and failed to provide required dispute-resolution services.
The settlement targets consumer-protection failures at one of the country’s best-known peer-to-peer payment platforms, where state officials alleged rapid user growth outpaced safeguards for fraud complaints, account lockouts and unauthorized transactions.
Pennsylvania will receive $1,137,695.72 under the proposed consent decree, Attorney General Dave Sunday’s office reported. The money will be used for future public protection and educational purposes.
The settlement remains subject to approval by the Philadelphia Court of Common Pleas.
State officials alleged Block told Cash App users their money was safe in ways that implied protections similar to traditional bank accounts, even as the company knew fraud on the platform was increasing. Investigators also alleged Block continued marketing Cash App aggressively rather than adequately warning users or strengthening protections.
“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,” Sunday said.
Sunday added that the settlement will “strengthen consumer protections and improve the ability of users to report and resolve fraud.”
According to the states, Block promoted Cash App direct deposits for paychecks and government benefits, including to unbanked and underbanked consumers who often used the app as a primary financial account.
Investigators alleged Block’s sign-up process used limited identity verification, making it easier for fraudsters to create accounts. They also cited years in which Cash App lacked phone support, leaving users to seek help through the app or social media.
That gap created openings for scammers operating fake customer-service phone numbers, according to the Attorney General’s Office. Users who called those numbers sometimes had accounts taken over or other financial accounts drained.
The states also alleged Block continued running its Cash App Fridays social media promotion after learning that fraudsters were using publicly posted $cashtags to target users and steal login information.
The Attorney General’s Office reported that some users were locked out of accounts for weeks after automated suspicious-transaction flags, leaving them without access to their money. Fraud victims also allegedly faced delays that limited their ability to recover stolen funds.
Under the settlement, Block agreed to maintain customer support capable of handling fraud complaints, account lockouts and related problems.
The company also agreed to offer live support around the clock, with phone access to a human representative for at least 13.5 hours a day and live chat access for at least 18 hours a day.
The agreement also requires Block to stop making false or misleading claims about Cash App’s safety, discontinue marketing practices known to increase fraud risk, educate consumers about common scams, investigate fraud claims and reimburse users for unauthorized transactions when required by law.
The multistate settlement 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.
Additional information about that settlement is available at https://www.consumerfinance.gov/enforcement/actions/block-inc/ and https://cashappcfpbsettlement.com/.
The consent petition was filed by Debra Djupman Warring and is pending court approval.
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