Cash App fraud settlement puts $936,000 in Michigan’s hands

A state payout with national strings attached

Michigan is set to receive $936,540 from a $45 million multistate settlement with Block, the company behind Cash App, after state officials said the payments platform misled users about safety and left fraud victims without promised help.clickondetroit The deal arrives through a coalition of 46 states and requires changes to Cash App’s customer support, fraud handling, and marketing practices.smnewsnet Michigan Attorney General Dana Nessel said the settlement also commits Block to putting stolen money back into the pockets of state residents.thealpenanews

The allegations focused on how Cash App presented itself to consumers who used the app for transfers, paychecks, or government benefits. Michigan officials said Block promoted direct deposits while implying the service carried protections similar to a bank, even though Cash App itself is not an FDIC-insured bank.clickondetroit

Fraud complaints exposed gaps in support

State attorneys general said Cash App grew quickly while leaving users vulnerable to account takeovers and scams. Investigators pointed to a fast sign-up process with minimal identity checks, years without phone support, and users who searched online for help only to reach fake call centers posing as Cash App representatives.thealpenanews +1

Regulators also criticized “Cash App Fridays,” a social media promotion that encouraged users to post their $cashtag for a chance to win money. Fraudsters then contacted entrants, claimed they had won, and tricked them into handing over login information; state officials said Block knew the promotion was linked to scams but kept running it for years.smnewsnet +1

The settlement forces service changes

Under the agreement, Block must maintain customer support capable of handling fraud complaints, account lockouts, and related problems. The company must offer live support 24 hours a day, including a human by phone for at least 13.5 hours daily and live chat for at least 18 hours daily.clickondetroit +1

Block also agreed to stop making false or misleading claims about Cash App’s safety, end marketing practices known to increase fraud, educate users about common scams, and meet legal obligations to investigate fraud claims and reimburse unauthorized transactions.thealpenanews Courthouse News reported that Block denied wrongdoing in the judgment, which says the agreement is not an admission of liability or fault.reuters

A broader bill for Cash App conduct

The state settlement follows earlier regulatory pressure on Block. Payments Dive reported that the agreement affirms Block’s separate commitment to distribute at least $75 million, and as much as $120 million, to consumers under a Consumer Financial Protection Bureau settlement.smnewsnet Michigan officials cited the same consumer-redress range as part of the broader resolution.clickondetroit

Block said the matter primarily relates to historical aspects of its business and that Cash App has made significant investments in consumer protection, customer service, and compliance.law The company’s shares were down about 1.5% on the day of the settlement coverage, according to The Block’s market data.law