In an unexpected turn of events, Cash App – the popular Block, Inc. peer-to-peer payment platform – agreed to a massive 15$ million settlement following a class action lawsuit over unauthorized transactions, fraudulent charges and account frozen accounts on the platform. Customers may be eligible to receive up to $2,500 as compensation.
This is just one case in a series of lawsuits against financial technology companies over account management and customer protection practices, which is putting these companies under increasing pressure to improve security and account management.
Cash App and the settlement details
In 2022, Cash App confirmed that an ex employee had gained illicit access to user accounts. In 2023, it was revealed that an anonymous user managed to access several accounts using recycled phone numbers. The company was then accused of lacking the appropriate security protocols to prevent unauthorized access to users accounts.
The 15$ million settlement will go to Cash App users who have been victims of illicit activities such as fraudulent transactions and or unjustified account suspension. Millions of users have been affected by data leaks that put their personal data’s privacy at risk. The settlement aims to provide compensation to affected users for reputation damage, emotional stress and financial losses related to transaction errors and privacy issues on the platform.
How much will claimants get?
Claimants will be entitled to receive up to $2.500 if they experienced incidents related to data security, unauthorized activity on their Cash App accounts or issues related to resolution of these incidents during the period from August 2018 to August 2024.
Users can also claim to be reimbursed for any lost time of up to three hours at a rate of 25$ per hour.
Finally, users can claim to be compensated for losses linked to documented fraudulent transactions during this period of time. If applying for this, they must present a copy of any communications informing the company about the unauthorized transaction, a copy of the police report or any other documentation proving that such unauthorized transaction took place on their accounts.
Who can claim a compensation?
In order to be eligible for compensation, users must have permanent residency in the United States and have experienced one of the following issues during the period from August 2018 to August 2024:
- Unauthorized access. For users whose personal information, Cash App accounts or Cash Investing accounts have been accessed or shared without their consent.
- Fraudulent transactions. This applies to unauthorized charges or illegal transfers made from users’ Cash App accounts.
- Resolution issues. This is for Cash App and Cash Investing customers who had difficulty resolving issues related to their accounts over this period of time.
Only eligible users who have submitted their documentation on time and whose claims have been accepted will be entitled to compensation.
Payment timeline
The court approved the settlement on January 13, 2024. The deadline to apply for compensation was November 18, 2024 – any supporting documentation to prove that users were affected by account freezes and fraudulent transactions had to be submitted by that date.
Although an official payment date is yet to be confirmed, affected users can expect to be paid end of 2025, either by direct deposit or check in the mail. In the meantime, claimants can:
- Check settlement method. Carefully choose which way you prefer to be paid, taking into account that checks in the mail can take longer to arrive than a direct deposit.
- Be patient. It can take up to 5 days to process a payment after it has been issued.
Claimants can check their compensation status on the official website that has been created for the settlement, Cash App Security Settlement. Claimants are asked to be patient while they wait for their payments to be made, as the claim assesment process may take a while.