Cash App is closing out the week on the hook for $255 million in multiple settlements around its consumer protections.
Block, the company that owns Cash App, agreed Wednesday to pay $80 million to 48 states that fined the company for violating laws intended to keep illicit activity off the platform.
“State regulators found Block was not in compliance with certain requirements, creating the potential that its services could be used to support money laundering, terrorism financing, or other illegal activities,” a press release from the Conference of State Bank Supervisors says.
Separately, the federal Consumer Financial Protection Bureau reached a settlement with Block on Thursday, in which the company agreed to pay $120 million to Cash App customers and another $55 million to the CFPB. According to the bureau, Cash App’s weak security measures put consumers at risk and made it difficult for users to get help after experiencing fraud on the platform. Cash App is also accused of tricking consumers into thinking that their bank, not Cash App, was responsible for handling disputes and that Cash App didn’t offer “meaningful and effective” customer service, which “left the network vulnerable to criminals defrauding users.”
How to regulate peer-to-peer money-transferring apps like Cash App is an ongoing fight. This week, NetChoice and TechNet sued to challenge the CFPB’s handling of such platforms like banks, calling it an “unlawful power grab.” Google filed a similar suit in December.
