Block settles Cash App fraud probe for $45 million

Block agreed to pay $45 million to a coalition of U.S. states to resolve a multistate investigation into fraudulent activity tied to its Cash App platform. The settlement addresses claims that the company failed to prevent scams and misled consumers about protections on the peer-to-peer payments service.

State attorneys general opened the probe after receiving consumer complaints about losing money to scams that used Cash App accounts and advertised services. Investigators examined whether Block’s policies and practices allowed scammers to register accounts, promote fraudulent services, or misrepresent the protections available to users.

Under the agreement announced by state officials, Block will provide funds intended to reimburse some harmed consumers and will adopt measures to strengthen fraud detection and prevention on Cash App. The states said the settlement requires improved transparency about fees and protections and increased oversight of third-party sellers that use the platform to advertise services.

Block did not admit wrongdoing as part of the settlement. The company released a statement noting it cooperated with investigators and has continued to invest in fraud prevention, customer support, transaction monitoring and advertising review processes on Cash App.

The investigation focused on scams tied to promised job offers, fake investment opportunities and impersonation fraud. State regulators and consumer advocates reported that scammers often used Cash App accounts to receive funds and to advertise services that helped turn stolen or illicit proceeds into usable money.

State officials reported that a portion of the settlement will be set aside for direct payments to affected consumers, while other amounts will support state enforcement actions. The agreement includes reporting requirements so regulators can track Block’s compliance and the effectiveness of the new controls.

Regulators have increased scrutiny of payment apps that handle person-to-person transfers as Cash App’s user base has grown. Officials overseeing the probe said their goals were to secure relief for consumers and to push platforms to adopt stronger consumer protections.

Cash App was launched by Square in 2013 and is now part of Block. The service allows users to send money, buy and sell Bitcoin and access other financial tools. Block has previously faced criticism over customer support and dispute resolution processes and has described ongoing efforts to update its fraud detection systems.

State attorneys general encouraged users to report suspected scams and to take precautions such as verifying contacts, avoiding wire transfers to unknown parties and enabling two-factor authentication. The settlement includes provisions intended to make it easier for consumers to recover funds when fraud occurs and to improve transparency about available protections.

Officials did not provide a complete list of participating states at the time of the announcement. Regulators will receive periodic updates on Block’s compliance with the settlement terms.