DELAWARE - Attorney General Kathy Jennings, with her counterparts in 45 states, announced a $45 million settlement with Block Inc., with Delaware to receive more than $300,000. Jennings settlement resolves allegations that Block, Inc, formerly known as Square, Inc., the company behind Cash App, violated state consumer fraud laws and failed to protect users.
The attorney general says that Block told Cash App that their money was safe when that wasn’t the case. At the time, Block knew fraud was on the rise, and instead of warning consumers, they doubled down on marketing, according to the attorney general. The attorney general also claims they made fraud easier with fast identity verification, years of no phone support, and asking users to publicly post their identifier tags on social media.
“The strong results achieved in this case are but one example of our office’s ongoing efforts to combat fraud against Delaware consumers in the face of rapidly emerging new financial technologies,” said Attorney General Kathy Jennings. “We are working tirelessly to provide meaningful oversight that keeps pace with new technologies without stifling innovation.”
Jennings says under the settlement, Block has agreed to implement practices to solve these issues, such as:
- Maintain customer support.
- Offer live support 24 hours a day.
- Stop making false claims about Cash App.
- Discontinue marketing practices that increase fraud.
- Educate customers about types of fraud.
- Fulfill legal obligation to investigate fraud claims and reimburse users.
Delaware will receive about $314,000 in the settlement, which will be deposited into the State’s Consumer Protection Fund to enable the Department of Justice Division of Fraud and Consumer Protection to continue its work.
Jennings says the settlement also reaffirms Block’s commitment to distribute between $75 to $120 million to compensate consumers nationwide. The settlement is being filed in the Delaware Court of Chancery and is subject to the final approval of that court.
