The Consumer Financial Protection Bureau (CFPB) has announced a $175 million settlement with Block, the parent company of popular peer-to-peer payments service Cash App, over allegations that the app allowed rampant fraud and misled its customers. The agency also found that Block’s investigations into unauthorized transactions were “woefully incomplete” and that the app was designed to trick consumers.
The CFPB’s enforcement action comes after a series of high-profile lawsuits against leading financial services companies, including a $80 million penalty for money laundering violations against Block just days ago. As part of the settlement, Block will pay up to $120 million in refunds to consumers and set up a 24-hour customer service program.
The CFPB’s director, Rohit Chopra, stated that “Cash App flouted its responsibilities” and burdened local banks with problems caused by the company. Block disputed these allegations, saying that it had made significant investments to bolster customer support, but ultimately decided to settle in order to focus on what’s best for its customers.
The settlement is the latest in a string of high-profile enforcement actions against financial services companies brought by the CFPB since its establishment in 2011. The agency has faced criticism from Republicans and will likely undergo changes with the incoming Trump administration, which may impact the regulator’s aggressive approach to consumer protection.
Source: https://fortune.com/2025/01/16/jack-dorsey-block-cash-app-consumer-financial-protection-bureau