MONTGOMERY, Ala. – Attorney General Steve Marshall announced on Thursday that Alabama will receive nearly $600,000 in a multistate settlement with the owner of Cash App.
The $45 million settlement joined by 46 states came amid allegations that Block, Inc. – the company behind the Cash App peer-to-peer payment app – misled customers about the app’s safety and did not provide the fraud protection and resolution required by law.
The AG’s statement said that Block misrepresented itself to customers and implied that it operated with the same protections as a bank, which was not the case. It also claimed that Block knew fraud was increasing on its platform but increased marketing instead of fixing the problem.
The statement said that Block had inadequate customer service, which left users with no recourse when fraud occurred.
“For years, Block actively promoted direct deposits of paychecks and government benefits into Cash App,” the statement reads. “It made a particular push to reach unbanked and underbanked consumers – people who would often rely on Cash App as their primary financial account, and who were especially vulnerable to fraud. Block grew its user base without making sure it could support those users when problems arose.”
In addition to dispersing $595,421 to Alabama, the agreement between Block and the states requires the company to implement new practices to resolve the issues outlined in the complaint.
Block must now offer 24-hour live support, with humans available by phone for at least 13.5 hours per day and live chat for a minimum of 18 hours per day. The platform must also stop using marketing practices known to increase fraud, like encouraging users to post their CashApp usernames on social media to participate in giveaways.
Marshall applauded the Oregon and Texas-led settlement in a press release.
“We have long advised consumers to use caution when using peer-to-peer programs for payments. This settlement sends a clear message that companies offering these services must be transparent, secure, and accountable,” he said. “Our office will continue to hold bad actors responsible and fight to ensure that consumers are protected in the digital marketplace.”