AUSTIN — Texas Attorney General Ken Paxton has co-led a multistate settlement with Block, Inc., the parent company of the payment app Cash App, that requires the company to pay $45 million and change certain business practices, resolving allegations that the company misled consumers about the safety of its platform and failed to provide fraud protection as marketed, according to the attorney general’s office.
According to Paxton’s office, Texas co-led the multistate investigation and 45 other states joined. The office said Texans will receive nearly $5 million as part of the settlement.
According to the attorney general’s office, Cash App is a service that allows users to transfer money to other users, and the company promoted direct deposit of paychecks and government benefits into the app — a marketing approach the office said was targeted at consumers who would come to rely on the app as their primary financial account.
The investigation, according to Paxton’s office, alleged that Cash App marketed its platform as a safe, bank-like alternative even as fraud on the app rose sharply and its consumer protections failed to keep pace with those in the traditional banking industry. According to the office, the investigation found lax verification standards, a years-long absence of phone support, and deceptive social media promotions left users exposed to scammers. The investigation also alleged that Cash App delayed internal fraud investigations, imposed unwarranted account lockouts that made it difficult for victims to recover stolen funds, and failed to investigate unauthorized transactions or issue refunds as required by law, the office said.
Under the settlement, according to Paxton’s office, Cash App is required to maintain 24-hour customer support, discontinue misleading safety claims, cease marketing practices known to increase fraud, and comply with its legal duty to investigate and reimburse users for certain unauthorized transactions.
“When Texans trust a financial platform with their paychecks, savings, and family’s security, they deserve to be fully protected as promised. I will make sure that they are,” Paxton said in a statement. “This settlement ensures that Texans who were harmed can recover what they are owed. It sends the clear and unmistakable message that exploiting consumers is not a business strategy—it’s a liability.”
Under Texas consumer protection practice, multistate settlements of this kind typically do not constitute an admission of wrongdoing by the settling company. Block’s response to the settlement was not included in the attorney general’s release.
How Texans affected can file a complaint
Texas consumers who believe they were harmed by Cash App practices covered in the settlement — including unauthorized transactions that were not properly investigated, refunds that were not issued, or difficulties recovering funds after fraud — can file a complaint with the Texas Attorney General’s Consumer Protection Division at texasattorneygeneral.gov.
Source: Office of the Texas Attorney General
