CFPB Fines Up to $175m for Cash App Fraud

The Consumer Financial Protection Bureau (CFPB) announced today that it is it calls BlockThe creator of the Cash App and the parent company of Square, to pay up to $ 120 million in “refunds and other repairs to consumers” and a fine of $ 55 million for the company’s fraud on its payment platform.

According to the CFPB, Cash App’s Terms of Service once stated that each bank linked to the money transfer account was responsible for handling disputes related to fraud cases, which is not true. Electronic Fund Transfer Act. Block could use those claims to avoid liability, and when he did investigate complaints, he relied on “intentionally frivolous investigations to suppress reports of illegal activity in favor of the company,” the CFPB explains.

Finding any type of Cash App customer was also difficult, according to the CFPB. Block included a customer support number on the Cash App cards and in the app’s Terms of Service, but calling it would direct users to “a pre-written message directing consumers to contact customer support through the app.” And reaching out to the company through the app or email often results in delayed or confusing responses.

In addition to Block’s $175 million fine, the CFPB is also directing the company to set up a 24/7 customer service line. Block has agreed to follow the plan. “While we strongly disagree with the CFPB’s misconduct,” the company said he shared on his blog“We made the decision to close this matter with the intention of putting it behind us and focusing on what is best for our customers and our business.”

The Consumer Financial Protection Bureau has taken a more aggressive approach to regulating payment apps and digital wallets in the last year of the Biden Administration. Price CFPB he added to his purpose from banks to wallets and payment apps in November 2024, and came later Zelle payment software in less than a month.

These attempts at control are also met with pushback. NetChoice, a trade association for Internet companies, and TechNet, “bipartisan tech CEOs,” both are suing the CFPB on its efforts to clean up digital payments, with well-known allegations of government fraud and that the CFPB failed to explain the risks it faced when it decided to regulate payment programs in the first place.

Update, January 16, 5:36PM ET: This article was amended after publication to clarify that the amount of the CFPB’s fine for Block is until $175 million, not $175 million.