Virginia to receive part of $45M multistate settlement with Cash App owner

Virginia Attorney General Jay Jones announced Monday that a multistate coalition including Virginia reached a $45 million settlement with Block Inc. over allegedly deceptive practices on its peer-to-peer payments app, Cash App.

Virginia will receive a $845,500 settlement payout as one of 46 participating states in the action.

“Virginians deserve to trust that the companies they do business with are acting legally and with integrity, and when a company acts outside the law or unethically, this office will hold them accountable,” Jones said in a statement.

According to a news release from Jones’ office, Block implied that Cash App “offered the same protections as a bank, which was not true,” while fraud on the app rose.

Per the news release, Block promoted direct depositing paychecks and government benefits into Cash App, specifically targeting people without bank accounts who would then rely on Cash App as their primary financial account, making them “especially vulnerable to fraud.”

The state coalition alleged that Block practices, including a “fast and frictionless” sign-up process with minimal identity verification, made it easy for fraudsters to create accounts and take advantage of vulnerable customers.

Cash App also lacked phone support “for many years,” meaning that the primary way for customers to reach out for assistance was via the app or social media. According to the state AG’s office, that meant customers searching for a phone number could find a fake 1-800 number ran by scammers, who would then drain those customers’ accounts. Jones’ office stated that Block was aware this was happening yet did not set up a phone line for years.

A “Cash App Fridays” social media promotion was also targeted by the coalition. Under the promotion, users were encouraged to publish their “$cashtag,” a unique account identifier, to win a weekly prize. This enabled fraudsters to reach out to users pretending they had won in order to gain access to their accounts. Jones’ office claimed Block was aware of this yet ran the promotion for years.

Victims of fraud were often left with no recourse due to delays in investigating the fraud and failures by Block to investigate unauthorized transactions or issue refunds when required. Jones’ office stated that some users were locked out of their accounts for weeks at a time.

“When companies strategically omit information and foster fraudulent practices, it hurts consumers and shakes confidence in our institutions,” Jones said in a statement.

Under the settlement, Block has agreed to maintain a 24-hour live support line, with a human available at least 13.5 hours per day by phone and 18 hours per day by live chat. Block also agreed to not make false or misleading claims about Cash App’s safety and to halt marketing practices known to increase fraud.

In January, Block and the Consumer Financial Protection Bureau reached a settlement in a matter stemming from Block’s alleged failure to provide effective customer service or address fraud on Cash App in violation of the Consumer Financial Protection Act. The settlement ordered Block to pay between $75 million and $120 million to compensate eligible consumers nationwide.

The consent judgment for Virginia’s settlement was filed on July 8 for approval and entry by the Richmond Circuit Court.