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In a major enforcement action, 48 state financial regulators have fined Block $80 million for violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations. Block, the parent company of Cash App, agreed to pay the penalty, hire an independent consultant to evaluate its BSA/AML program, and address any deficiencies identified within 12 months. The investigation revealed compliance lapses that could enable illegal activities, including money laundering and terrorism financing.

Separately, the Consumer Financial Protection Bureau (CFPB) has mandated that Block provide up to $120 million in refunds and other redress to affected consumers, alongside a $55 million penalty paid to the CFPB's victims relief fund. The agency determined that Cash App's security protocols were insufficient, allowing fraud to thrive on the platform. Additionally, Block's failure to properly investigate unauthorized transactions led to consumer financial losses, with the firm directing users to seek redress through banks while denying their claims. Block must now establish 24-hour customer service, thoroughly investigate fraud reports, and issue appropriate refunds.

The CFPB’s enforcement underscores broader scrutiny of digital payment platforms. CFPB Director Rohit Chopra criticized Cash App for creating a fraud-prone environment and shifting burdens onto banks. The regulator’s recent lawsuit against Zelle's operator, Early Warning Services, and major banks including JPMorgan Chase and Wells Fargo, further highlights the agency's focus on combating fraud in mobile payment services.

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