Consumer complaint received 2023-05-01
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Block, Inc. (MA)

I am writing to request action regarding Cash Apps handling of a disputed transaction. I was defrauded of a sum of {$750.00} USD by ( an ) individual ( s ) who gained unauthorized access to the XXXX account of, and thereby impersonated, the intended recipient. The imposter ( s ) directed me, under false and fraudulent pretenses, to provide credentials of my bank account to Cash App, with whom I had never held an account previously and through which I have not performed any additional transactions aside from that which is disputed. I contend that Cash App violated the Electronic Fund Transfer Act ( XXXX ) by demonstrably failing to conduct a reasonable investigation. 

At approximately XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX on XX/XX/2023, I received a message via XXXX XXXX from the account created by and belonging to my landlord. The message directed me to send rent payment to the Cash App account $ XXXX. At approximately XXXX XXXX XXXX  on XX/XX/2023, I sent {$750.00} USD from my debit account to the specified Cash App account. The payment was accepted by the other user at approximately XXXX XXXX XXXX. XXXX XXXX XXXX XXXX  I texted my landlords phone number to request confirmation that she had received the payment. In the ensuing conversation, she indicated that she had never used Cash App. She later stated that she had not logged into her XXXX account on those days, and at least one other XXXX user also received messages from her account that she had neither written nor sent. A notarized affidavit from my landlord is included in this parcel. 

At approximately XXXX XXXX XXXX that same morning, I requested a refund from the Cash App user $ XXXX. The user declined and, later that day, their Cash App handle changed from $ XXXX to $ XXXX. Upon receiving notice that the refund was declined, I reported the user 's fraudulent activity to Cash App through an in-application functionality. At XXXXXXXX XXXX XXXXXXXX, I contacted customer support via the applications chat functionality ; a copy of this conversation is attached. I provided screenshots of the XXXX conversation in which the impersonator directed me to share account details with Cash App under the pretense that they were my landlord. On Sunday, XX/XX/XXXXXXXX XXXX XXXX XXXX XXXX XXXX, a company representative named XXXX responded and stated that Cash App was unable to cancel or refund this payment. 

At approximately XXXX XXXX XXXX on the day of the incident, I filed a complaint with the Internet Crime Complaint Center ( XXXX ). On the following day, XX/XX/XXXX, I filed a report with local police, a copy of which is included in this parcel. At approximately XXXX XXXX XXXX on XX/XX/XXXX, I filed a complaint with the Federal Trade Commission ( FTC ) ; the number of the FTC report is XXXX. 

On XX/XX/2023, I saw that the transaction had been posted to my debit account. At approximately XXXXXXXX XXXX XXXXXXXX that night, I called Cash App Customer Support and received a return call from XXXX. I was asked to state my name, the time of the transaction, the amount of the transaction, and the Cash App handle of the recipient to confirm my identity. After doing so accurately three times, the representative declined to speak with me further about the incident on the basis that my identity could not be confirmed. At approximately XXXX XXXX XXXX I called Cash App support again and was contacted by another representative, who asked me to state the model of phone through which I had provided account information to Cash App. After providing this information, I was told that the dispute would be formally investigated. AXXXX XXXX XXXX XXXX  the following morning, less than XXXX hours after the investigation was supposedly initiated, I received a message via e-mail stating that Cash App had completed its investigation and found no error to have occurred. The case number associated with this claim decision is XXXX. I promptly requested documentation related to my dispute. At XXXX XXXX XXXX XXXXat afternoon, I received documentation that Cash App relied on to determine the outcome of the dispute. This documentation simply listed the date, status, amount, sender, and recipient of the transaction. Importantly, the copy of the correspondence that I had provided on XX/XX/XXXX, receipt of which had been confirmed by the representative named XXXX, was omitted from this documentation. 

Cash App violated the Electronic Fund Transfer Act ( EFTA ) by demonstrably failing to conduct a reasonable investigation into the allegation of error. Although policies published on the Cash App website deny responsibility for transfers that occur as the result of deception, such private network rules do not reduce consumer protections afforded by the EFTA. The protections afforded by Regulation E of the EFTA extend to consumers deceived into sharing account access details which are then used to complete an Electronic Fund Transfer ( EFT ). In this instance, the imposter ( s ) directed me, under false and fraudulent pretenses, to provide credentials of my bank account to Cash App, with whom I had never held an account previously and through which I have not performed any additional transactions aside from that which is disputed. 

According to guidelines provided by the CFPB on its website ( https : //www.consumerfinance.gov/compliance/compliance-resources/deposit-accounts-resources/electronic-fund-transfers/electronic-fund-transfers-faqs/ ) at the time of this writing, when a non-bank peer-to-peer ( P2P ) payment provider initiates a debit card pass-through payment from the consumers bank account, the non-bank P2P provider is generally considered a financial institution under Regulation E of the EFTA. As such, Cash App, as the P2P provider in this scenario, is required by Regulation E to conduct a reasonable investigation into the allegation of error. As stated on the CFPB website, The Bureau found that a financial institution did not conduct a reasonable investigation when it... did not consider other relevant information such as the consumers assertion that the EFT was unauthorized or for an incorrect amount.

Cash App did not consider relevant information in its possession and therefore failed to conduct a reasonable investigation. The documents upon which the investigation was conducted omitted the correspondence between myself and the unauthorized user of my landlord 's XXXX account, a copy of which had been sent to Cash App support directly through the application on the day of the incident. Receipt of this evidence was confirmed by a Cash App representative, as described above. Furthermore, Cash App provided no alternative avenue of providing additional evidence, such as the police report or my landlord 's notified affidavit. The brevity of the formal investigation, which lasted less than XXXX hours, did not allow for submission of documentation via traditional mail.