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Cash App Users To Get Refunds In $175M Order As Feds Target Fraud

Cash App's parent company will have to pay $175 million for poorly protecting its users from fraud and financial crimes on the payment platform, officials said.

The CFPB ordered Cash App's parent company Block to pay $175 million for poorly protecting its users from fraud.

The CFPB ordered Cash App's parent company Block to pay $175 million for poorly protecting its users from fraud.

Photo Credit: Cash App and Wikimedia Commons - ajay_suresh

The Consumer Financial Protection Bureau ordered Block to refund up to $120 million to users harmed by fraud, the federal agency said in a news release on Thursday, Jan. 16. The parent company of Cash App, which has more than 56 million accounts, must also pay a $55 million fine into the CFPB’s victims relief fund.

The CFPB found that Block failed to properly investigate unauthorized transactions and deprived users of meaningful customer support, putting millions of accounts at risk.

"Cash App created the conditions for fraud to proliferate on its popular payment platform," CFPB Director Rohit Chopra said. "When things went wrong, Cash App flouted its responsibilities and even burdened local banks with problems that the company caused."

Block, which also owns other apps like Square and TIDAL, issued a statement contesting the ruling but emphasized its commitment to resolving the issue. 

"We strongly disagree with the CFPB's mischaracterizations," the company said. "However, we made the decision to settle this matter in the interest of putting it behind us and focusing on what’s best for our customers and our business."

The CFPB uncovered that Block used inadequate security protocols for Cash App, ignored its legal obligations to investigate unauthorized transactions, and instead directed users to contact their banks for assistance. Many customers found that disputes were denied, leaving them with significant financial losses.

Cash App’s terms of service misled users into believing their linked banks were responsible for disputes, according to the CFPB. While federal law requires peer-to-peer platforms to investigate fraud, Block closed investigations prematurely and in its own favor.

Regulators also said the customer support number listed on Cash Cards and in the app didn’t connect users to live assistance. Instead, a pre-recorded message directed users back to the app, leaving them vulnerable to fraudsters posing as Cash App representatives online.

Block's $120 million in refunds will go to affected users, including those whose accounts were locked for extended periods or denied provisional credits during disputes. Cash App must also provide 24-hour, live-person customer support and investigate disputes thoroughly.

Consumers do not need to take action to receive refunds, the CFPB said.

Block also said it has improved Cash App's customer service and fraud prevention systems, including AI-driven scam detection and live phone support. The company also pointed to educational campaigns aimed at helping users recognize scams.

This action follows increased scrutiny of digital payment platforms. In November 2024, the CFPB extended federal oversight to large nonbank payment services, and the agency sued major banks and Early Warning Services in December 2024 over fraud on the Zelle payment app.

You can file complaints about financial products and services on the CFPB's website.

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