New Mexico to receive more than $388,000 in Cash App fraud settlement
New Mexico will receive more than $388,000 from a multistate settlement alleging Cash App misled users about fraud protections and failed to adequately help victims.
Multistate agreement requires Block to strengthen customer support, investigate unauthorized transactions and stop marketing practices known to increase fraud.
Organ Mountain News report
ALBUQUERQUE - New Mexico will receive more than $388,000 as part of a $45 million multistate settlement with Block Inc., the company behind Cash App, over allegations that the payment platform misled consumers about its safety and failed to adequately protect users from fraud.
Attorney General Raúl Torrez announced the settlement Friday. New Mexico joined 45 other states in alleging that Block allowed fraud to grow on Cash App while failing to provide the customer support, investigations and reimbursements required by law.
“New Mexico working families should be able to trust a company that promises to safeguard their finances, especially a large, national platform like Cash App,” Torrez said. “I’ll continue to protect New Mexico consumers who were taken advantage of by fraudsters.”
The states alleged that Cash App aggressively marketed itself to people without traditional bank accounts or with limited access to banking services. Those users were more likely to rely on the app as their primary financial account and could be especially vulnerable when accounts were locked or money was stolen.
According to the complaint, Block continued expanding Cash App’s user base without building adequate systems to handle fraud complaints and account-access problems. Some users were locked out of their accounts for weeks, while others faced delays that made it difficult or impossible to recover money taken by scammers.
The states also alleged that Cash App’s design and marketing practices created additional opportunities for fraud.
Organ Mountain News
Block used a fast sign-up process with limited identity verification, making it easier for scammers to create accounts, according to the complaint. For years, Cash App also lacked telephone customer support, leaving users to rely on an in-app messaging system.
Consumers searching online for a customer-service number sometimes encountered scammers posing as Cash App representatives. Those scammers could take control of users’ accounts or gain access to other financial accounts.
The states alleged that Block knew about those schemes but failed to adequately warn users or establish legitimate telephone support until years after the problem emerged.
The complaint also cited Cash App Fridays, a social media promotion that encouraged users to publicly post their unique $cashtag identifiers for a chance to win prizes. Scammers then contacted some participants, falsely claimed they had won and persuaded them to disclose account credentials.
The states alleged that Block continued the promotion despite knowing it was being exploited by fraudsters.
Under the settlement, Block must maintain customer-service systems capable of handling fraud complaints, account lockouts and other problems. The company must offer live support around the clock, including access to a person by telephone for at least 13.5 hours each day and by live chat for at least 18 hours each day.
Block also agreed to stop making false or misleading claims about Cash App’s fraud protections, discontinue marketing practices known to increase fraud and directly educate users about common scams.
The settlement requires the company to investigate fraud claims and reimburse users for unauthorized transactions when required by law.
The agreement is part of a 46-state enforcement action. Consumers can find additional information through the Consumer Financial Protection Bureau and the Cash App settlement website.
Keep Reading
New Mexico Environment Department to hold hearing for Project Jupiter data center air quality permit — The hearing follows strong public interest and allegations that supportive comments used residents’ and elected officials’ names without permission.
New Mexico health officials warn of heat illness as temperatures top 100 — More than 450 people have sought emergency care for heat-related conditions statewide since April 1.
Organ Mountain News featured on New Mexico In Focus — Founder and editor Damien Willis discusses local journalism, community listening and building an independent newsroom in southern New Mexico.
