CFPB Fines CashApp $175 Million for Allegedly Mishandling Fraud Claims | Global News Avenue

If you’ve lost money to scammers, or your account has been frozen on a popular peer-to-peer payment platform, you may want a refund.

On Thursday, the Consumer Financial Protection Bureau fined Cash App and its parent company Block $175 million for how they handled customer fraud complaints during the pandemic. The bureau said Cash App failed to properly investigate cases where users reported fraud and instead directed them to ask the bank whose account was linked to Cash App to reverse the transaction.

“Cash App created the conditions for fraud to spread on its popular payments platform,” said CFPB Director Rohit Chopra. “When things went wrong, Cash App flouted its responsibilities and even had local banks sued for problems the company caused. Bear the burden.”

Of that amount, $120 million will be paid to customers and $55 million will be paid to a victim relief fund established by the bureau.

The bureau said customers who never received the refunds they were due, whose complaints were not investigated or whose accounts were frozen will receive payments without taking any action.

The company denies wrongdoing and says it changed its customer service practices from 2019 to 2023, the period covered by the lawsuit.

“While we strongly disagree with the CFPB’s mischaracterization, we have decided to resolve this matter so we can put it behind us and focus on what is best for our customers and business,” Bullock said in a release.

The bureau said the company failed to establish adequate safeguards against scammers and failed to properly investigate cases where users reported unauthorized fund transfers. For years, the bureau has said the company didn’t even have a valid customer service phone number; it was just a recorded message directing callers to use the app.