Arkansas Attorney General Tim Griffin announced that the state will receive $453,754 as part of a $45 million multistate settlement with Block, Inc., the company that operates the mobile payment platform Cash App.
The settlement resolves litigation brought by Arkansas and 45 other state attorneys general alleging that Block misled consumers about the safety of Cash App, failed to adequately protect users from fraud and did not provide fraud protections and dispute resolution services required under law.
According to the attorneys general, Block marketed Cash App as a secure platform and encouraged users to deposit paychecks and government benefits into their accounts, particularly targeting unbanked and underbanked consumers who often relied on the service as their primary financial account.
The states alleged that as fraud on the platform increased, Block continued expanding its user base and marketing efforts without implementing sufficient safeguards for consumers.
Investigators also alleged that several of Cash App’s practices made fraud easier to commit, including a streamlined account creation process with limited identity verification requirements and promotional campaigns encouraging users to publicly share their Cash App identifiers.
The settlement further alleged that Cash App lacked adequate customer support for years, including the absence of live telephone assistance.
Authorities said some users searching online for assistance instead contacted fraudulent phone numbers operated by scammers, resulting in unauthorized access to accounts and financial losses.
Under the agreement, Block has agreed to implement and maintain several consumer protection measures, including maintaining customer support capable of addressing fraud complaints and account lockouts, expanding access to live customer service representatives, improving fraud education efforts and discontinuing marketing practices found to increase fraud risks.
The company has also agreed to fulfill its legal obligations to investigate fraud claims and reimburse consumers for unauthorized transactions.
The settlement additionally reaffirms Block’s commitment under a separate agreement with the Consumer Financial Protection Bureau to distribute between $75 million and $120 million in compensation to consumers nationwide.
Earlier this year, the Consumer Financial Protection Bureau found that Block failed to provide effective customer service, failed to take appropriate steps to detect and prevent fraud and did not properly investigate certain unauthorized transaction disputes as required under federal law.
The bureau also ordered the company to pay $55 million in civil penalties and implement changes to its business practices.
