The app's investigations into fraud were "woefully incomplete," regulator says
The owner of Cash App has been ordered to pay up to $120 million to victims of fraud on its payments platform on top of a $55 million fine, the Consumer Financial Protection Bureau said Thursday.
Block, the owner of Cash App that has more than 56 million accounts, had weak security protocols that allowed fraud to thrive on its platform, the financial regulator said.
The CFPB said law requires Cash App to investigate and resolve disputes of unauthorized transactions, but the investigations were "woefully incomplete."
Cash App allegedly directed fraud victims to go to their banks to reverse charges, which the app would subsequently deny, the CFPB said.
Cash App created the conditions for fraud to proliferate on its popular payment platform, CFPB Director Rohit Chopra said. When things went wrong, Cash App flouted its responsibilities and even burdened local banks with problems that the company caused.
The pandemic did it
In response, Cash App said a surge of new users during the pandemic posed challenges and ithas since made investments to customer service and combatting scams.
"While we strongly disagree with the CFPBs mischaracterizations, we made the decision to settle this matter in the interest of putting it behind us and focusing on whats best for our customers and our business," the company said."The historical issues raised in this agreement do not reflect the Cash App experience today."
Separately, state regulators on Wednesday ordered Cash App's owner Block to pay$80 million for anti-money laundering law violations.
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-16 18:05:47
