How a useless customer service number landed the Cash app in big trouble with regulators

Cash App’s parent company is paying nine figures to settle a fight with federal regulators, thanks in part to an allegedly useless customer service phone number.

Thursday, the Office of Financial Protection of the Consumer orderly Block, which runs the popular payment platform and point-of-sale system Square, to return up to $120 million to users and pay a $55 million fine for failing to adequately combat fraud on its service.

According to the agency, Cash App shirked its legal responsibility to investigate complaints from customers who claimed their accounts had been hijacked or were victims of scams. It also improperly closed refund requests for unauthorized charges.

But the Cash app also stumbled by not offering a live helpline that users could call when something went wrong, the CFPB said. in your order. Instead, it provided a phone number that simply directed individuals to the app for assistance — a corner-cutting decision that the agency says led to a series of problems that scammers were able to exploit .

“The Cash app created the conditions for fraud to proliferate on its popular payment platform,” CFPB Director Rohit Chopra said in a statement. “When things went wrong, the Cash app ignored its responsibilities.”

The claims of the office are somehow similar to what it contains recent demand against Zelle’s operators, which it also accused of failing to take precautions against fraud or failing to respond sufficiently to customers who had been targeted by scammers.

The announcement comes a day after Block, co-owned by Twitter founder Jack Dorsey, okay to an $80 million settlement with state financial regulators for failing to monitor money laundering in the Cash app.

In both cases, Block said the settlements relate to old issues with its service that have since been resolved. (Thursday’s deal covers shares held in the company through 2023.) The company also disputed some of the allegations against it.

“While we strongly disagree with the CFPB’s mischaracterizations, we made the decision to settle this matter in the interest of putting it behind us and focusing on what is best for our customers and our business”, Block. he said in a statement.

Still, the complaint offers an object lesson in the legal value of a live customer service agent.

According to the CFPB, until 2021 the Cash app didn’t offer an actual helpline, even though its terms of service encouraged users to call it to report problems with their accounts. Instead, their debit card included a phone number that led to a pre-recorded message instructing customers to file a complaint on the app, with no option to leave a message.