A $45 million settlement will see Block pay 46 states after regulators found major gaps in Cash App’s fraud prevention. State authorities are stepping up as federal oversight recedes, raising the stakes for fintech compliance.
Block has agreed to pay $45 million to 46 U.S. states following a multi-state investigation into its handling of fraud on Cash App, the company’s widely used money-transfer and digital banking platform. The settlement, announced today, comes as state regulators intensify enforcement efforts amid a weakened Consumer Financial Protection Bureau (CFPB) under the Trump Administration.
According to a New York State court filing, Block was accused of misleading customers by suggesting Cash App offered the security of a traditional bank, falsely implying that user balances were FDIC-insured, failing to implement effective fraud-prevention measures, and neglecting to investigate reports of unauthorized transactions. Until 2021, Cash App did not provide live customer support by phone, instead directing users to the app via a pre-recorded message.
The investigation was led by Texas and Oregon, with Texas set to receive $5 million, Oregon $3 million, and New York $1.6 million from the settlement. The remaining funds will be distributed among the other participating states.
This court order reinforces Block’s obligation to pay up to $120 million stemming from a January 2025 CFPB enforcement action related to fraud and compliance failures. While the Trump Administration rolled back several CFPB actions, including one against Zelle, the order against Block remains in effect. Block did not admit wrongdoing, stating the agreement resolves a “previously disclosed legacy matter” and highlighting recent investments in consumer protection and compliance.
Block has faced mounting regulatory scrutiny in recent years. In addition to today’s settlement and the upcoming CFPB penalty, the company was fined $80 million by multiple states and $40 million by the New York Department of Financial Services in 2025 for anti-money-laundering violations. A 2021 Forbes investigation reported that some fintechs and rental car companies blocked Cash App transactions due to high fraud rates, with one fintech CEO describing Cash App’s business-to-business fraud support as “almost non-existent.”
Under the new settlement, Block must implement a comprehensive compliance management system, avoid misleading customers about fraud protection, provide live phone support for at least 13.5 hours daily, and respond to unauthorized transaction complaints within three business days.
The settlement may influence a pending New York case against Zelle, where Attorney General Letitia James has accused operator Early Warning of allowing fraud to proliferate. Financial services consultant Todd Baker told Forbes that the Cash App settlement increases the likelihood of a negotiated resolution with Zelle, given the similar allegations. Early Warning maintains that fraud rates on Zelle are “exceptionally low” and is contesting the lawsuit. The court will next consider Zelle’s motion to dismiss the case.
Block, formerly known as Square, was founded by Jack Dorsey in 2009 and has grown into a major fintech player. As of 2026, Cash App reports 59 million active users, making it one of the most widely used digital banking platforms in the United States. The company has faced increasing regulatory attention as its user base and transaction volume have expanded.
