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CFPB Orders Operator of Cash App to Pay $175 Million and Fix Its Failures on Fraud — (2025)

Updated August 19, 2025

The Consumer Financial Protection Bureau ordered Cash App's operator to pay $175 million for failures in fraud prevention and customer protection. This settlement addresses the company's inadequate response to fraud complaints and security vulnerabilities that harmed consumers.

Type
Other
Amount
$7,500,000,000
Location
None, None
Source
Consumer Financial Protection Bureau

Case Details

Title: CFPB Orders Operator of Cash App to Pay $175 Million and Fix Its Failures on Fraud
Amount: $175,000,000
Location: Federal (CFPB)
Date: December 2024
Type: Regulatory Enforcement Action
Source: Consumer Financial Protection Bureau

Opening Summary

The Consumer Financial Protection Bureau ordered Block, Inc., operator of Cash App, to pay $175 million in December 2024 for failing to adequately protect consumers from fraud and investigate disputed transactions on its peer-to-peer payment platform.

Case Background

Cash App, operated by Block, Inc. (formerly Square), is one of the largest peer-to-peer payment platforms in the United States, serving millions of consumers who use the app to send and receive money electronically. The CFPB's enforcement action stemmed from systemic failures in Cash App's fraud prevention and customer service practices that left consumers vulnerable to financial harm.

The investigation revealed that Cash App's rapid growth was not accompanied by adequate investment in fraud prevention systems and customer protection measures. Despite being aware of widespread fraud on its platform, the company failed to implement sufficient safeguards to protect users from scammers and fraudulent transactions. The platform became a target for various fraud schemes, including romance scams, fake prize notifications, and other deceptive practices that resulted in significant financial losses for consumers.

The CFPB found that Cash App's customer service operations were inadequately staffed and poorly equipped to handle the volume of fraud complaints and dispute resolution requests from users. Many consumers reported difficulty reaching customer service representatives and receiving timely responses to their fraud claims, leaving them without recourse when they fell victim to scams.

Key Allegations / Claims

The CFPB's enforcement action centered on several key violations of consumer protection laws. The agency alleged that Cash App failed to maintain adequate fraud monitoring systems despite being aware of high levels of fraudulent activity on its platform. The company did not implement sufficient identity verification procedures for new accounts, making it easier for scammers to create fake profiles and target legitimate users.

Additionally, the CFPB found that Cash App violated the Electronic Fund Transfer Act by failing to properly investigate disputed transactions and provide timely provisional credits to consumers who reported unauthorized transfers. The company's dispute resolution process was found to be inadequate, with many legitimate fraud claims being denied without proper investigation.

The agency also alleged that Cash App engaged in unfair practices by failing to provide adequate customer service support for fraud victims. The company's customer service representatives were reportedly undertrained and lacked the tools necessary to effectively assist consumers who had been defrauded. This left many victims unable to recover their stolen funds or receive proper assistance in resolving their cases.

Resolution & Amount

The $175 million settlement includes both civil penalties and consumer redress. A significant portion of the settlement amount will be used to compensate consumers who suffered financial losses due to Cash App's failures to prevent fraud and properly investigate disputed transactions.

As part of the settlement, Block, Inc. agreed to implement comprehensive reforms to its fraud prevention and customer service operations. The company must enhance its fraud monitoring systems, improve identity verification procedures for new accounts, and strengthen its dispute resolution processes to comply with federal consumer protection laws.

The settlement also requires Cash App to significantly improve its customer service capabilities, including hiring additional staff and providing enhanced training to representatives who handle fraud-related complaints. The company must also implement new policies and procedures to ensure timely and thorough investigation of disputed transactions.

Applicable Law / Enforcement

This enforcement action was brought under the Consumer Financial Protection Act, which grants the CFPB authority to supervise and enforce compliance with federal consumer financial laws. The case also involved violations of the Electronic Fund Transfer Act (EFTA) and its implementing regulation, Regulation E, which establish consumer rights and financial institution responsibilities for electronic fund transfers.

The CFPB's authority extends to payment processors and money transmitters like Cash App, allowing the agency to investigate and take action against companies that fail to comply with consumer protection requirements. The settlement demonstrates the agency's commitment to holding fintech companies to the same consumer protection standards as traditional financial institutions.

This case reflects the CFPB's broader enforcement priorities regarding digital payment platforms and the agency's focus on ensuring that technological innovation does not come at the expense of consumer protection.

Context & Benchmarks

This $175 million settlement represents one of the largest enforcement actions taken by the CFPB against a peer-to-peer payment platform. The case highlights the growing regulatory scrutiny of fintech companies and digital payment services as these platforms become increasingly prevalent in consumer financial transactions.

Sources