Jack Dorsey’s Block resolves Cash App fraud allegations with 46 states for $45 million.

      Block, the payment company chaired by Jack Dorsey, has agreed to pay $45 million to settle allegations from 46 U.S. states regarding its mishandling of fraud on Cash App, its money-transfer and digital banking platform. This settlement is a reflection of state regulators stepping in where the Consumer Financial Protection Bureau (CFPB) has stepped back during the Trump administration.

      As per a court filing in New York linked to this settlement, Block was accused of misleading customers by suggesting that Cash App offered the same security as a traditional bank and that their funds were FDIC-insured, which would only be the case if a partner bank failed. Regulators also claimed that the company didn’t have effective fraud-prevention measures and frequently neglected to investigate reports of unauthorized transactions.

      A significant point in this case is that Cash App did not provide a live customer-support phone number until 2021, and investigators noted that the company was aware of this issue since 2018. In the meantime, scammers set up fake helplines to deceive users into giving up their account access.

      Texas and Oregon were at the forefront of the investigation, with the $45 million settlement being shared among the 46 involved states. Texas is set to receive $5 million, Oregon $3 million, and New York approximately $1.6 million, according to state press announcements. Block has not admitted any wrongdoing, stating that it agreed to the judgment "solely to conclude this matter." A spokesperson referred to the case as "a previously disclosed legacy matter primarily related to historical aspects of our business," highlighting the company's investments in consumer protection, customer service, and compliance for the millions of users who rely on Cash App.

      The app reportedly has around 59 million active users, based on Forbes data. This settlement should not be conflated with previous penalties. In January 2025, the CFPB mandated Block to pay $175 million for similar issues, including $120 million designated for customer restitution and a $55 million fine. The new court order reaffirms the $120 million restitution obligation, which remains intact despite the administration dismissing various other CFPB actions from the Biden era, including one targeting the bank-owned app Zelle. With significant reductions made to the bureau this year, coalitions of state regulators are increasingly taking up the cases that the CFPB has withdrawn, as reported by Forbes.

      Block's regulatory issues have been escalating. Over the past two years, it has faced more scrutiny than most fintech companies, including an $80 million multistate fine and a separate $40 million penalty from the New York Department of Financial Services, both related to anti-money-laundering failures.

      As part of the new settlement, Block has agreed to establish a "comprehensive compliance management system," avoid exaggerating its fraud protections, maintain live phone support for at least 13.5 hours per day, and respond to complaints about unauthorized transactions within three business days. Several state attorneys general also emphasized the need for 24/7 customer service.

      This case could have implications beyond Cash App. New York Attorney General Letitia James is investigating Early Warning, the bank-owned operator of Zelle, for allowing fraud to proliferate, which analysts believe has similarities to the Block allegations. “The substantial settlement with Cash App increases the likelihood of a negotiated resolution with Zelle, as the fundamental claims surrounding fraud risk disclosure and prevention are alike,” said Todd Baker, a senior fellow at Columbia University’s business and law schools.

      Early Warning has denied the allegations, stating to Forbes that fraud against Zelle users has "always been exceptionally low" and that the lawsuit lacks merit. Baker warned that the Zelle case might be more challenging to win since the banks that co-own the network, rather than Zelle itself, bear the compliance responsibilities, and the service does not actively solicit customers like Cash App does. The next step in that case is a ruling on Zelle's motion to dismiss.