The Consumer Financial Protection Bureau (CFPB) announced today that it commands a Blockthe creator of the Cash App and parent company of Square, to pay up to $120 million in “refunds and other redress to consumers” and a $55 million fine over how the company handles fraud on its payment platform.
According to the CFPB, Cash App's Terms of Service at one point claimed that any bank linked to an account for transferring funds is responsible for addressing disputes about fraudulent charging, something that is not usually true under Electronic Fund Transfer Act. Block would use that claim to avoid taking responsibility, and when it investigated a complaint, it relied on “intentionally poor investigative practices to shut down reports of unauthorized transactions in the company's favor ,” the CFPB statement explained.
Accessing any kind of customer service for the Cash App is also a challenge, according to the CFPB. Block includes a customer service number on Cash App cards and in the app's Terms of Service, but calling it will lead users to “a pre-recorded message directing consumers to contact to customer support through the app.” And contacting the company via app or physical mail often leads to delayed or confusing responses.
In addition to the up to $175 million in Block fees, the CFPB is also requiring the company to set up a live 24/7 customer support line. Block agreed to comply with the order. “While we strongly disagree with the CFPB's mischaracterizations,” the company said shared on its blog“We made the decision to settle this matter in the interest of putting it behind us and focusing on what's best for our customers and our business.”
The Consumer Financial Protection Bureau has taken an increasingly aggressive approach to regulating payment apps and digital wallets in the last year of the Biden Administration. The CFPB expanded its scope from just banks to wallets and payment apps in November 2024, and beyond the payment app Zelle less than a month later.
Attempts at regulation have also faced pushback. NetChoice, a trade association for online companies, and TechNet, “a bipartisan network of technology CEOs,” have both sued the CFPB in its efforts to clean up digital payments, with familiar claims of government overreach and that the CFPB failed to explain the risks it was addressing when it decided to regulate payment apps in the first place.
Update, January 16, 5:36PM ET: This story was updated after publication to clarify that the amount of Block's combined CFPB fine was up to $175 million, instead of $175 million.
