Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Block to pay $45 million in Cash App fraud settlement, (Jul 10, 2026)

By Shashi Kant, B.A. LL.B., LL.M.

The multistate settlement requires Block to change Cash App practices involving fraud prevention, customer support, account restrictions, and unauthorized transfers.

New York Attorney General Letitia James and a bipartisan coalition of state attorneys general secured a $45 million settlement with Block, Inc., formerly Square, Inc., over allegations involving Cash App fraud prevention, customer service, account restrictions, and consumer disclosures. The New York consent judgment resolves allegations that Block misled Cash App users about the platform’s safety, fraud protections, customer support, and Federal Deposit Insurance Corporation insurance treatment, and failed to comply with electronic-fund-transfer error-resolution requirements. Block denied wrongdoing and admitted no liability.

Alleged Cash App practices. According to the New York Attorney General’s press release, the attorneys general alleged that Block falsely implied Cash App worked like a bank with the same protections for customer funds, claimed in its terms of service that it had “cutting edge” fraud-detection technology, and failed to maintain a consistent fraud-detection system. The release also said Block did not have a functioning fraud hotline for users to report scams. The attorneys general alleged that fraud on Cash App rose sharply while Block continued marketing the platform. According to the release, Cash App accounts did not require a Social Security number or date of birth to create, and there was no limit on how many accounts one person could open, allowing scam networks to operate on the platform.

The release also said Cash App users who searched online for customer support, after finding no official support phone number, sometimes reached scammers posing as Cash App customer service. Those scammers allegedly took over Cash App accounts or drained users’ other financial accounts. The attorneys general further alleged that Block’s Cash App Fridays social-media promotion encouraged users to publicly post their Cash App identifiers, after which fraudsters contacted users and tricked them into giving up login information.

Consent judgment. The consent judgment resolves the New York Attorney General’s investigation under New York Executive Law § 63(12), General Business Law §§ 349 and 350, the Electronic Fund Transfer Act, Regulation E, and related consumer-protection laws. Block entered into similar agreements with attorneys general in 46 participating states. The judgment covers Block, its subsidiaries, affiliates, successors, and assigns in connection with Cash App. Under the judgment, Block must comply with state consumer-protection law, the Electronic Fund Transfer Act, and Regulation E in offering and providing Cash App products and services. It must maintain a compliance management system, including a committee responsible for overseeing compliance with the judgment, and must provide employee and contractor training related to the judgment and to unauthorized electronic fund transfer investigations.

Marketing and disclosures. Block is prohibited from making false, misleading, or deceptive statements about Cash App’s services, customer service, notices of error, and fraud protection. It also may not make false or misleading statements about whether Cash App is a bank. Where applicable, Block must clearly and conspicuously disclose that Cash App is a financial services platform, not a bank, and that banking services are provided by Cash App’s bank partners. The judgment also prohibits misrepresentations about FDIC insurance, including whether pass-through insurance applies to consumer funds held in Cash App accounts. Block must stop marketing that it knows has resulted in increased fraud against consumers on Cash App and must provide direct education to users about common types of fraud.

Customer support and error resolution. The judgment requires Block to maintain customer service capable of handling consumer complaints, notices of error, account-access issues, suspected fraud, and non-customer reports of fraudulent identity use. Cash App must provide live customer support 24 hours a day, with live human telephone support available at least 13.5 hours each day and live human chat available at least 18 hours each day. For notices of error, Block must conduct prompt, thorough, and reasonable investigations under Regulation E. It must report investigation results to consumers, correct errors within one business day after determining an error occurred and provide provisional credit within 10 business days if an investigation cannot be completed by then. Block may not require consumers to contact the recipient of a peer-to-peer transfer, file a police report, or provide information beyond what Regulation E requires before initiating an investigation.

Account restrictions and fraud controls. Block must maintain procedures to notify consumers about account locks, suspensions, or deactivations where appropriate and not prohibited by law, and must inform affected consumers how they may access funds or address account restrictions. It also must implement policies, procedures, safeguards, and measures reasonably designed to mitigate, prevent, detect, limit, and address fraudulently induced transactions on Cash App.

Payments. Block must pay $45 million to the participating attorneys general, to be divided among the participating states. New York’s share is $1,602,435.34. The judgment also provides for consumer redress of at least $75 million and no more than $120 million, but states that Block’s redress payment under a Jan. 16, 2025, CFPB consent order will satisfy the redress requirements of the judgment and that no further redress payment is required under the judgment if that obligation is met.

Companies: Block, Inc.; Square, Inc.

News: Advertising ConsumerProtection StateUnfairTradePractices NewYorkNews