Agreement requires stronger customer service, enhanced fraud safeguards and more than $522,000 payment to the state
OKLAHOMA CITY — Cash App, one of the nation’s most widely used peer-to-peer payment platforms, has agreed to strengthen fraud protections and improve customer service under a multistate settlement involving Oklahoma that resolves allegations the company failed to adequately protect consumers from fraud. Oklahoma will receive $522,696.19 under the agreement.
The settlement resolves allegations against Block Inc., the parent company of Cash App, that it misled consumers about the app’s safety, failed to adequately protect users from fraudulent activity and did not provide the fraud resolution services required by law. Block denied the allegations and entered into the settlement without admitting liability.
“Cash App told Oklahomans their money was safe while fraud on the platform was climbing and the company did nothing to stop it,” Attorney General Gentner Drummond said in announcing the settlement. “Companies that build a product around handling people’s paychecks and benefits don’t get to treat customer protection as optional.”
According to the allegations, Block’s identity verification procedures made it easier for scammers to create fraudulent accounts, while limited customer support left consumers vulnerable to impersonation schemes and delayed access to their money. The states also alleged the company encouraged consumers without traditional bank accounts to rely on Cash App as a primary financial service.
Customer protections expanded
Under the consent judgment, Block agreed to implement a series of operational and consumer protection reforms, including:
- Maintaining customer service around the clock, including live human telephone support available at least 13.5 hours each day.
- Improving procedures for investigating fraud claims and unauthorized electronic fund transfers.
- Providing provisional credits in certain circumstances while fraud investigations are pending.
- Clearly disclosing that Cash App is a financial services platform rather than a bank and accurately explaining the scope of FDIC insurance associated with customer funds.
- Strengthening fraud prevention systems, scam warnings and consumer education efforts.
- Ending marketing practices found to contribute to increased fraud and enhancing internal compliance and reporting requirements.
The settlement also requires Block to maintain compliance programs and submit periodic reports documenting its efforts to meet the agreement’s requirements over the coming years.
Oklahoma’s share
Oklahoma’s payment is part of a $45 million distribution among participating states. The consent judgment approving the settlement was entered July 10 in Oklahoma County District Court.
The multistate agreement also references a separate Consumer Financial Protection Bureau consent order under which Block agreed to provide at least $75 million, and potentially as much as $120 million, in consumer redress. The Oklahoma settlement does not specify how any consumer payments would be distributed.
The consent judgment also requires Block to continue reporting on its compliance with the agreement, with the new consumer protection measures remaining in effect under the court’s oversight.
