Cash App Faces Major Federal and State Settlements Over Fraud, Account Lockouts, and Customer Service Failures

Cash App and its parent company, Block, Inc., have faced major enforcement actions from federal and state regulators over how the company handled fraud, unauthorized transactions, customer complaints, and locked accounts. The federal Consumer Financial Protection Bureau previously entered an order against Block, and in the summer of 2026 Texas and dozens of other states announced a separate multistate settlement addressing many of the same problems.

One of the biggest concerns involved Cash App’s handling of fraud and unauthorized transactions. Regulators alleged that Cash App sometimes failed to properly investigate consumer complaints, improperly directed customers to their banks or other third parties, and did not always provide temporary credits or refunds when required by federal law. Regulators also criticized Cash App for failing to maintain adequate safeguards against fraudulent accounts, account takeovers, and other scams.

Customer service was another major issue. Regulators found that consumers often had difficulty reaching a real person when something went wrong. For years, Cash App advertised customer-service information even though consumers could not always reach a live representative. This became especially dangerous because scammers created fake Cash App customer-service numbers online, leading some consumers to turn over account information to criminals.

The settlements also address consumers who were locked out of their Cash App accounts or unable to access their money. Regulators alleged that some accounts were frozen, suspended, or deactivated without adequate explanations or timely assistance. Under the new requirements, Cash App must maintain procedures for notifying consumers about account restrictions, explaining how they can regain access to their funds, responding to complaints, and restoring access when appropriate. Cash App must also provide significantly improved live customer support.

The financial consequences are substantial. The CFPB order requires at least $75 million and potentially as much as $120 million in consumer compensation, along with a $55 million civil penalty. Settlement payments to eligible consumers began going out in 2026. The separate multistate settlement announced in July 2026 requires Block to pay an additional $45 million to participating states, including Texas.

Perhaps most importantly for consumers, these settlements show that companies providing payment-app and financial services cannot simply ignore fraud complaints, lock consumers out of their accounts indefinitely, or make misleading promises about the protections available to customers. Consumers who have had money stolen through Cash App, had unauthorized transactions denied without a proper investigation, or been unable to access funds because their account was frozen may have legal rights beyond whatever assistance Cash App voluntarily offers.