Cash App parent company agrees to $45 million settlement with Illinois, 44 other states

Illinois will get $1.1 million of a $45 million, 45-state settlement with money transfer app Cash App’s parent company, which was accused of misleading customers about the app’s security.

Block Inc. will face $55 million in civil penalties and also have to pay customers nationwide somewhere from $75 million to $120 million as part of the settlement, which includes the Consumer Financial Protection Bureau.

In a statement, Illinois Attorney General Kwame Raoul said the settlement holds the company accountable and requires it to “change its harmful practices.”

“Block told Cash App users their money was safe and falsely implied that the app worked like a bank, with the same protections,” Raoul said. “Block was aware that fraud on its platform was rising sharply and failed to warn users, strengthen protections or provide real help to users when things went wrong.”

A company spokesperson confirmed the settlement and said the company has made "significant investments in consumer protection, customer service, and compliance."

"We share the commitment of the attorneys general to addressing industry challenges and continue to invest in operations and technology to promote a safe and healthy financial ecosystem," the spokesperson said in a statement provided to the Sun-Times Wednesday night.

The lawsuit accused the company of not preventing fraud, and even of having systems that made it easier to commit that fraud. Minimal identity verification allowed someone to create fake or multiple accounts, and the company had no phone support line. Instead, customers who had been defrauded often were provided by those fraudsters with fake online customer support phone numbers, the suit alleged.

As part of the agreement, the company must offer at least 13.5 hours of human-staffed phone lines per day as part of 24-hour support, as well as reimburse customers for fraudulent transactions, stop marketing the app as safe and educate users about the dangers of fraud.