Cash App is closing the week with $255 million in multiple settlements surrounding its consumer protections.
Block, the company that owns Cash App, agreed on Wednesday pay 80 million dollars to 48 states which fined the company for violating laws intended to keep illicit activity off the platform.
“State regulators found that Block did not meet certain requirements, creating the possibility that its services could be used to support money laundering, terrorist financing or other illegal activities,” says a press release from the Conference of Supervisors of State Banks.
On the other hand, the Federal Consumer Financial Protection Office reached an agreement with Block on Thursday, in which the company agreed to pay $120 million to Cash App customers and another $55 million to the CFPB. According to the bureau, Cash App's weak security measures put consumers at risk and make it difficult for users to get help after experiencing fraud on the platform. Cash App is also accused of misleading consumers into thinking that their bank, not Cash App, was responsible for handling disputes and that Cash App did not offer “meaningful and effective” customer service, which “left the network vulnerable to criminals who defrauded users. “
How to regulate peer-to-peer money transfer apps like Cash App is a constant struggle. This week, NetChoice and TechNet filed a lawsuit challenging the CFPB's handling of platforms like banks, calling it an “unlawful power grab.” Google filed a similar lawsuit in December.
