Attorney General Steve Marshall announced on Thursday that Alabama was part of a multi-state settlement with Block, Inc., the company behind Cash App, regarding the app's safety and fraud prevention.
The states involved in the $45 million settlement agreement allege that Block told Cash App users their money was safe and implied it worked like a bank and offered the same protections. Plaintiffs claim that Block knew that fraud on its platform was rising sharply and then doubled down on marketing instead of bolstering protections and warning users.
"We have long advised consumers to use caution when using peer-to-peer programs for payments," Marshall said. "This settlement sends a clear message that companies offering these services must be transparent, secure, and accountable. Our office will continue to hold bad actors responsible and fight to ensure that consumers are protected in the digital marketplace."
Block was also accused of intentionally targeting underbanked consumers who often relied on Cash App as their primary financial account, encouraging them to direct-deposit paychecks and government benefits into Cash App.
"Block's failure to provide adequate customer service and to fulfill its promise to protect users from fraud had real consequences for real people," Marshall's office said. "Innocent users who experience automated account locks for suspicious transactions were frequently locked out of their accounts for weeks without a way to access their money. Victims of fraud through the app were often left with no recourse because delays made it impossible to recover stolen funds from scammers and because Block failed to investigate unauthorized transactions and issue refunds when required by law.
In addition to the cash settlement, Block agreed to stop making false or misleading claims about Cash App's safety and its protection of users from fraud, maintain customer support capable of resolving fraud complaints, directly educate users about fraud risks, and more.
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