CFPB fines Cash App operators $175 million

The CFPB levied a $175 million fine on Block, the operator of Cash App, to refund and pay redress to consumers for employing weak fraud security protocols and failing to properly investigate unauthorized transactions. 

The bureau claims the Cash App terms of service misled consumers to avoid responsibility for investigating disputed transactions and the organization used intentionally ineffective investigation practices. The CFPB states that CashApp customer support resources were known to be ineffective.  While Block knew this left consumers open to additional fraud risk, it failed to take timely action, according to the CFPB. These practices violate the Electronic Fund Transfer Act (EFTA) and Regulation E. 

The enforcement action orders Block to:

  • Pay $120 million to harmed consumers;
  • Fix customer service and investigate disputes; and
  • Pay a $55 million penalty to the CFPB’s victims relief fund

America’s Credit Unions supports establishing uniform Regulation E expectations for nonbanks, but parts of the consent order raise concern about the CFPB’s strategy for assessing financial institution handling of certain transactions that would be considered authorized transactions under EFTA.
 

heelo