Block mobile payment service, which owns Cash App, agrees to pay NYS $1.6M as part of a $45M settlement

Block, the owner of the mobile payment service Cash App, agreed to pay New York $1.6 million as part of a $45 million settlement with 46 states after its officials failed to protect customers from scams and fraud, the state attorney general said.

New York Attorney General Letitia James announced the settlement Wednesday, saying that Cash App users were not properly protected from fraud under the misbelief that financial information and accounts had the same protection as banks, her office said.

“New Yorkers were promised that Cash App was a safe and secure platform to send money, but in reality, the app exposed them to rampant fraud,” James said in a statement. “For years, Cash App users lost money to costly scams because Block cared more about profits than protecting its users.”

The settlement also calls on the company to reimburse customers for unauthorized charges.

In a statement Wednesday, Block company officials said, “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,” the company said.

Other states party to the suit included Colorado, Connecticut, Florida, Indiana, Oregon, Texas, Vermont and Washington.

Authorities said the company did not have fraud protection systems or a hotline to report scams. The company added a customer support phone number in 2021 to handle fraud claims, state officials said.

“Block knew fraud on its platform was rising sharply, but instead of warning users or strengthening protections, it doubled down on marketing. Block focused on drawing in new customers while allowing scam accounts to proliferate,” James’ office said Wednesday.

There was no limit on new accounts in Cash App, and the company did not require a Social Security number or other personal information to open an account, the attorney general’s office said.

Under the settlement, Block agreed to improve customer service to handle fraud complaints, customers locked out of their accounts and other issues.

The company must add 24-hour live support, including a phone hotline managed by real people for 13.5 hours a day and live chat for 18 hours a day.

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.