How a useless customer service number got the Cash app into big trouble with regulators
The parent company of the Cash app is paying nine figures to settle a dispute with federal regulators, partly over an allegedly useless customer service phone number.
Thursday, the Consumer Financial Protection Bureau ordered Block, which operates the popular payment platform and point-of-sale system Square, will pay up to $120 million in refunds to users and a $55 million fine for failing to properly combat fraud on its service.
According to the agency, CashUp shirked its legal responsibility to investigate complaints from customers who claimed their accounts had been stolen or were victims of fraud. It also stonewalled claims for refunds on unauthorized charges.
But the Cash app has been hampered by not providing users with a physical helpline when something goes wrong, CFBB said. In his order. Instead, it simply provided a phone number that directed individuals to the app for help — a corner-cutting decision the agency says created several problems that scammers could exploit.
“Cash App has created the conditions for fraud to flourish on the popular payment platform,” CFPB director Rohit Chopra said in a statement. “When things go wrong, the Cash app takes over.”
The bureau’s claims are similar to those it recently filed against Zele operators, accusing them of failing to take precautions against fraud or failing to respond adequately to customers caught by scammers.
Read more: Is it safe to store money in apps like Venmo, PayPal, and the Cash app?
The announcement comes a day after Twitter founder Jack Dorsey is owned by Block. agreed An $80 million settlement with state financial regulators for failing to police money laundering on the cash app.
In both cases, Block said that he spoke after the agreements related to the old issues with the service were resolved. (Thursday’s deal includes deals at the company through 2023). The company also disputed some of the allegations.
“While we strongly disagree with the CFPB’s misconduct, we have decided to put this matter behind us and focus on what is best for our customers and our business,” Block said. He said in a statement released..
Still, the complaint provides an object lesson in the legal value of a live customer service agent.
According to CFBB, the As of 2021 Cash app doesn’t offer a real helpline, even though its terms of service urge users to call to report problems with their accounts. Instead, the debit card included a phone number that led to a pre-recorded message instructing customers to file a complaint on the app without the option to leave a message.