Block Settles for $255 Million Over Cash App Fraud

Block Inc., led by Jack Dorsey, has been ordered to pay a total of $255 million to federal and state regulators for deficiencies related to its Cash App service, which allegedly failed to adequately protect users from fraud. The Consumer Financial Protection Bureau (CFPB) accused Block of weak security protocols and of directing users who experienced fraud to their banks for redress, which Block would then deny. Under the settlement, Block will pay up to $120 million to victims of fraud and a $55 million penalty to the CFPB's victim relief fund. Additionally, state regulators imposed an $80 million fine related to violations of anti-money laundering laws and mandated Block to hire a consultant to review its compliance programs. The CFPB's director criticized Block for allowing conditions that facilitated fraud on its platform. Block has stated that the issues are historical and aims to focus on improving customer experience moving forward.