Consumer complaint received 2025-01-19 00:00:00
Product: Checking or savings account — Checking account
Issue: Problem with a lender or other company charging your account — Transaction was not authorized
Company: Block, Inc.
State: CA

Complaint narrative:
Today, the Consumer Financial Protection Bureau ( CFPB ) ordered Block, the operator of the peer-to-peer payments app Cash App, to refund and pay other redress to consumers up to {$120.00} XXXX and pay a penalty of {$55.00} XXXX into the CFPBs victims relief fund. Block employed weak security protocols for Cash App and put its users at risk. While Block is required by law to investigate and resolve disputes about unauthorized transactions, the companys investigations were woefully incomplete. Block directed users who had suffered financial losses as a result of fraud to ask their bank to attempt to reverse transactions, which Block would subsequently deny. Block also deployed a range of tactics to suppress Cash App users from seeking help, reducing its own costs.

Cash App created the conditions for fraud to proliferate on its popular payment platform, said CFPB Director XXXX XXXX. When things went wrong, Cash App flouted its responsibilities and even burdened local banks with problems that the company caused. 

Block, Inc. ( NYSE : SQ ) is a publicly traded corporation whose principal executive offices are in XXXX, California. Block offers multiple digital payments products for businesses and consumers, including the point-of-sale payment system Square and the consumer payment service Cash App. Cash App is one of the largest peer-to-peer payment platforms in the United States, with more than 56 million accounts. It allows consumers to send and receive electronic money transfers ; accept direct deposits ; and use a prepaid card, XXXXash Card, to make purchases and ATM withdrawals. Block made approximately {$7.00} XXXX in gross profit in 2023, approximately {$4.00} XXXX of which was generated by Cash App. 

Cash App attempted to avoid many of its investigative obligations through tricking consumers with its Terms of Service. For example, many Cash App users link their bank account to the app. When a transaction occurs, the money is pulled from the users bank account and sent to the transaction recipient. In Cash Apps Terms of Service, consumers are led to believe that disputes are the responsibility of their linked bank. The Electronic Fund Transfer Act generally requires that peer-to-peer platforms, including Cash App, investigate disputes of unauthorized transactions, and a company can not simply use fine print to escape these legal requirements. When it did conduct investigations, Block used intentionally shoddy investigation practices to close reports of unauthorized transactions in the companys favor.

Block also deprived Cash App users of meaningful and effective customer service and left the network vulnerable to criminals defrauding users. While Block included a telephone number on the back of its Cash Card and in its Cash App Terms of Service, for many years this telephone number did not connect consumers to customer support of any type. Instead, it led to a pre-recorded message directing consumers to contact customer support through the app. Consumers could only contact Block through the app or through U.S. mail and were often met with delayed, inadequate, confusing, or inaccurate responses. Consumers looking for an alternate route to Cash App customer service through web searches were targeted by fraudsters posing as Cash App representatives, who tricked them into giving up their passwords and other personal information. Block knew that its customers were being targeted by fraudsters in this way but failed to take timely action to address the issue.

Enforcement Action Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including those engaging in unfair, deceptive, or abusive acts or practices. The CFPB also has the authority to enforce the Electronic Fund Transfer Act. The CFPBs order requires Block to : Pay {$120.00} XXXX to harmed consumers : Block is required to pay up to {$120.00} XXXX in refunds and other redress to consumers whose unauthorized transfers were not investigated, consumers who did not receive refunds they were entitled to, and consumers whose accounts were locked for an extended period of time or who were not provided provisional credits during a delayed investigation. Block must pay a minimum amount of {$75.00} XXXX in refunds and other redress. The CFPB will enforce the orders redress requirements to ensure affected Cash App users receive redress. Consumers will not need to take action at this time to obtain redress. 
Fix customer service and investigate disputes : To ensure that the misconduct does not recur, the order requires Block to set up 24-hour, live-person customer service. The order also requires Block to fully investigate unauthorized transactions and to provide timely refunds, where appropriate. 
Pay a {$55.00} XXXX fine : Block will pay a {$55.00} XXXX penalty to the CFPBs victims relief fund. 

**Consumer Financial Protection Bureau ( CFPB ) Complaint Against CashApp** **Complainant : XXXX XXXX **Company Name : CashApp ( Block, Inc. ) ** **Account Number:XXXX XXXX XXXX XXXX **Date of Incident : XX/XX/scrub>/2023 - XXXX2023** **Total Amount in Dispute : $ XXXX -- - **Complaint Summary : ** I am filing this formal complaint against CashApp for its negligent, unfair, and abusive handling of multiple unauthorized, malicious, and fraudulent transactions on my account. Despite providing CashApp with sufficient information to investigate my claim, their response has been grossly inadequate and unprofessional. CashApp 's immediate denial of my disputes within 24-48 hours of my report demonstrates a complete lack of due diligence in investigating the matter. **Details of the Incident : ** 1. **Unauthorized Transactions : ** - On XX/XX/scrub> 2023, I contacted CashApp to report multiple fraudulent transactions on my account, amounting to {$7700.00}. The transactions were made by a merchant operating under the name XXXX, with locations in XXXX XXXX and XXXX, starting on XX/XX/year>2023. - The disputed transactions are as follows : - XX/XX/scrub>/2023 : {$550.00} - XX/XX/year>2023 : {$480.00} - XXXX/XXXX/2023 : {$480.00} - XXXX/XXXX/2023 : {$480.00} - XX/XX/year>2023 : {$480.00} - XX/XX/scrub>/2023 : {$480.00} - XX/XX/year>2023 : {$480.00} - XXXX/XXXX/2023 : {$480.00} - XX/XX/scrub>/2023 : {$480.00} - XX/XX/scrub>/2023 : {$480.00} - XX/XX/scrub>/2023 : {$480.00} - XX/XX/year>2023 : {$460.00} - XX/XX/year>2023 : {$460.00} - XX/XX/scrub>/2023 : {$460.00} - XXXX/XXXX/2023 : {$460.00} - XX/XX/scrub>/2023 : {$460.00} 2. **Negligent Investigation : ** - CashApp failed to conduct a thorough investigation into these unauthorized transactions. They denied my disputes within 24-48 hours, without ever reaching out to the merchant or conducting a full review of the circumstances. - I requested documentation from CashApp to understand the basis for their decision, but the only document provided was a basic receipt/invoice. This document clearly indicates that the card was never present at the time of the transactions, suggesting that my information could have been stolen and used without my authorization. 3. **Violation of Consumer Rights : ** - My funds are FDIC insured, and as a consumer, I am entitled to protection and a thorough investigation in cases of unauthorized transactions. CashApps actions in declining my disputes and failing to investigate properly constitute a violation of these rights. - Additionally, CashApp has not provided any substantial proof or affidavit under penalty of perjury to justify their actions or the validity of the transactions. 4. **Material Misrepresentation : ** - I assert that CashApps failure to investigate these transactions properly, combined with their inadequate response and lack of evidence, constitutes material misrepresentation. This is a clear case of fraudulent behavior that has caused significant financial harm to me as a consumer. 5. **Precedent Case : ** - I reference the case of *Salinas, et al. v. Block, Inc. and Cash App Investing, LLC*, where Block and Cash App Investing were FOUND negligent and breached other obligations to users when they failed to implement appropriate controls to prevent unauthorized access to and use of Cash App accounts and when they mishandled and failed to adequately resolve customer complaints regarding unauthorized and unintended transactions. **Requested Relief : ** 1. **Immediate Reimbursement : ** I request a full reimbursement of the {$7700.00} that was fraudulently taken from my account. 2. **Comprehensive Investigation : ** I demand a thorough investigation into these unauthorized transactions, including communication with the merchant to provide proof that these transactions were authorized by me, including my signature or identification. 3. **Detailed Explanation : ** I request a detailed explanation from CashApp regarding the rapid denial of my dispute, including any evidence or documentation that was used to reach this decision. 4. **Formal Apology and Assurance : ** I demand a formal apology from CashApp for their negligent handling of this matter and assurance that appropriate measures will be taken to prevent such occurrences in the future. If these issues are not resolved promptly, I will have no choice but to escalate this matter through small claims court and/or arbitration. This complaint serves as formal documentation of my administrative process in seeking remedy. I expect CashApp to address these concerns with the seriousness they deserve and take immediate corrective action. **Govern yourselves accordingly. ** I have attached the document you allege was sent to me confirming and verifying that this transaction was authorized. THIS DOCUMENT is not sufficient to uphold in court. When i claim that a transaction was unauthorized, the bank must provide specific evidence to prove that the transaction was, in fact, authorized. The requirements may vary depending on the jurisdiction, but generally, the following are essential : 1. Evidence of Authorization Signed Document or Agreement : The bank may need to produce a signed document, such as a transaction authorization form, showing your consent.

Digital or Electronic Authorization : If the transaction was conducted online, the bank must show proof that you authenticated it using credentials like a password, PIN, biometric data ( e.g., fingerprint or facial recognition ), or a one-time code.

2. Authentication Records IP Address or Location Data : For online transactions, the bank might provide evidence of the device or location where the transaction occurred, matching it to your known usage patterns.

Timestamp and Confirmation Logs : Records showing when and where the transaction was initiated, including confirmation of successful authentication.

3. Transaction Receipts or Evidence Merchant Records : Proof from the merchant showing that goods or services were provided in connection with the transaction.

Point-of-Sale Records : If the transaction was in person, records from the payment terminal, including any signed receipts.

4. Compliance with Industry Standards Fraud Detection Protocols : Evidence that the bank followed established fraud-detection measures at the time of the transaction.

Two-Factor Authentication Evidence : Proof that additional security measures, like two-factor authentication, were applied and successfully completed.

5. Your Banking Agreement Terms of Service : A copy of the agreement you signed when opening the account, showing the terms of authorization and dispute resolution.

Dispute Response Timeline : Evidence that they responded to your claim within the legally required timeframe.

If the bank can not provide sufficient evidence that the transaction was authorized by you or a party you granted authority to, they are generally required to reimburse the amount of the disputed transaction under consumer protection laws like the Electronic Fund Transfer Act ( EFTA ) in the U.S. or similar regulations in other countries.

Company response to consumer: Closed with explanation