Block Inc. Settles Lawsuit For $45M Over Claims It Failed To Protect Customers From Fraud – AfroTech
Block Inc. has agreed to a multimillion-dollar settlement with a group of state attorneys general.
The tech company, which owns Cash App, faced several allegations that its users across 46 states were not protected from fraud, WRNJ Radio reports. Examples included ramping up marketing efforts in the wake of increased fraud claims rather than implementing additional protections, and allowing users to create multiple Cash App accounts without information such as a Social Security number or date of birth.
The complaint also cited Cash App’s “Cash App Fridays” promotion, alleging that it encouraged users to publicly share their usernames, making them more vulnerable to scams.
For those who claimed to have been scammed, there was also no direct phone line to contact the Cash App support team, leading them to contact third parties that scammers allegedly ran, WRNJ Radio reports.
“Cash App failed to protect its users from fraud and then made it nearly impossible for victims to recover what they lost,” said Attorney General Brown in a news release. “This settlement strengthens the company’s fraud and dispute resolution practices: protections that Maryland consumers deserve when they trust a business with their money.”
While Block Inc. has not admitted the claims are true, it has agreed to settle the lawsuit for $45 million. The funds are being paid to a group of state attorneys general and includes an additional commitment to disburse $75 million to $120 million to customers impacted by the claims, according to the press release.
Block Inc. has also agreed to launch a 24/7 support center with live chat agents available for a minimum of 18 hours, while phone agents will be available for a minimum of 13.5 hours, per the release.
Block Inc. will also stop marketing efforts that contribute to fraud, educate users about fraud and its different types, and investigate fraud claims and reimburse customers who were victims of unauthorized transactions, according to the press release.
“We’ve reached an agreement that resolves a previously disclosed legacy matter that primarily relates to historical aspects of our business. Cash App has made significant investments in consumer protection, customer service, and compliance in order to safeguard and serve the tens of millions of Americans who rely on Cash App to meet their banking and credit needs. We share the commitment of the attorneys general to addressing industry challenges and continue to invest in operations and technology to promote a safe and healthy financial ecosystem,” said a company spokesperson, per WRNJ Radio.
