Block settles with states over Cash App allegations

Block Inc. agreed to pay $45 million to settle allegations lodged by 46 states that the company misled consumers about the safety and security of its popular peer-to-peer payment app, Cash App; failed to protect users from fraud on the platform; and didn't resolve fraud allegations as required by law. "In short, the company failed to help people when things went wrong," the Oregon attorney general's office said in a press release.

Oregon and Texas led the investigation that resulted in the settlement, according to the attorneys general offices of those states. The money will be used by the states to reimburse consumers who lost money on Cash App due to fraud and other reasons.

"This settlement ensures that Texans who were harmed can recover what they are owed," said Texas Attorney General Ken Paxton. "It sends a clear and unmistakable message that exploiting consumers is not a business strategy – it's a liability." Texas is set to receive $5 million of the $45 million settlement to disburse to affected consumers in the state.

"Cash App told people their money was safe, and millions of Oregonians and Americans believed them, including a lot of people who didn't have other options," like the unbanked, Oregon Attorney General Dan Rayfield said in statement. Oregon will receive $3 million.

In a separate matter, the Washington state Attorney General Nick Brown, just secured a $20 million settlement from Block resolving an investigation into how Block handled fraudulently transferred unemployment deposits to Cash App accounts from Washington's Employment Security Office during the COVID pandemic.

"Block presented Cash App as a safe alternative to a traditional bank but failed to create the robust protections and safeguards that Washington law requires," Brown said.

Unemployment benefits using stolen credentials

Brown's office described Washington state's settlement with Block as the second phase of ongoing work to hold financial companies accountable for failing to maintain anti-fraud controls to detect suspicious unemployment benefit transfers during the pandemic.

In the first phase, the Washington attorney general's office filed 26 complaints and 37 motions against various companies demanding forfeiture of ill-gotten funds between August 2021 and September 2023—actions that resulted in the return of $41.5 million in stolen funds to the state's employment security department.

In the second phase, announced on July 8, 2026, the attorney general's office alleged that between March and August 2020, at least $22 million in unemployment benefits from the state's employment security department were fraudulently transferred through Cash App accounts as a result of criminals applying for benefits using Washingtonian's stolen personally identifiable information. In so doing, the state said, Block violated Washington's Consumer Protection Act.

$46 million to 45 states

The states' allegations mirror closely those detailed in a consent decree entered into between Block and the Consumer Financial Protection Bureau in January 2025. Block paid $75 million as part of that settlement to compensate affected consumers.

The multi-state investigation found that Cash App marketed its platform as a safe, bank-like alternative, despite fraud on the app rising sharply and its consumer protections failing to keep pace with those used by the broader banking system. Lax verification standards, a years-long absence of phone support and deceptive social media promotions left users exposed to scammers, Texas Attorney General Paxon stated.

Block's policies didn't just fail to stop fraud; in several ways it made it easier, the attorneys general related. Examples they provided include:

• A sign-up process designed to be fast and frictionless, with minimal identity verification, which made it easier for fraudsters to create accounts.

• Lack of phone support. Users who needed help could only message through the app or social media. People who searched online for a phone number often ended up calling fake 1-800 numbers run by scammers posing at Cash App. The scammers would then take over the accounts or drain users' other financial accounts. Block knew this was happening and didn't warn users or set up a real phone line until years later.

• Block ran a social media campaign called Cash App Fridays, encouraging users to publicly post their $cashtag for a chance to win weekly prizes. Fraudsters would often contact those users, tell them they'd won and trick them into handing over login information. The states allege that Block knew about these scams for years, yet kept running the promotion anyway.

• Innocent users who experienced automated account lock outs for suspicious transactions were frequently locked out their accounts for weeks without any way to access their money.

Under the multi-state settlement, Block agreed to implement and maintain responsible practices to resolve errant policies. Actions it promised to take include:

• Maintain customer support that can resolve fraud complaints, account lockouts and other problems.

• Offer live support 24 hours a day, with a human available by phone at least 13.5 hours a day and live chat at least 18 hours a day.

• Stop making false or misleading claims about Cash App's safety and how it protects consumers from fraud.

• Directly educate consumers about common types of fraud.

• Fulfill its legal obligations to investigate fraud claims and reimburse users for unauthorized transactions.

The Washington and multi-state settlements highlight increasing enforcement targeting peer-to-peer payment platforms as regulators push providers to strengthen fraud controls, improve customer support and meet their consumer protection obligations.

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