NY AG says Cash App exposed vulnerable users to 'rampant fraud'

Published Jul 11, 2026 at 10:15 a.m. ET

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Cash App, the peer-to-peer payment app used by millions across New York and beyond, was so lax with its onboarding controls, according to research cited in class-action court filings , a user could successfully clear the hurdle of identity verification by submitting a photo of a Barbie doll.

Fake accounts opened under names including Jesus Christ, Elon Musk and Donald Trump successfully conducted transactions “without triggering any verification safeguards or identity validation checks,” according to the court papers.

California-based parent company Block Inc. employed so few safeguards it “actively enabled” fraudsters to scam customers, many of them unbanked or underbanked , said New York Attorney General Letitia James, whose office, joined by a coalition of states’ attorneys general, conducted its own investigation of Cash App for alleged violations of business and consumer protection laws.

The results of that inquiry form the basis of a new state court settlement , announced earlier this week, with James’s office and 45 other state attorneys general. Block agreed to pay some $45 million to the states, including a $1.6 million penalty to New York and nearly $900,000 to New Jersey.

“New Yorkers were promised that Cash App was a safe and secure platform to send money, but in reality, the app exposed them to rampant fraud,” James said in a statement. “For years, Cash App users lost money to costly scams because Block cared more about profits than protecting its users.”

Block, the technology company run by billionaire Jack Dorsey, did not respond to a request for comment on the agreement . Under terms of the consent judgment, Block denied any wrongdoing. The company is a leader in a technology-based payment system that, for an increasing number of consumers, has shifted from bank branches to cellphones.

As part of the agreement, Block also reaffirmed its intention to satisfy a previously determined settlement , brokered by the federal Consumer Financial Protection Bureau in January 2025, in which it agreed to a payout of $75 million to $120 million to harmed consumers, as well as a $55 million penalty to the bureau.

In that action, the Consumer Financial Protection Bureau found Block failed to take “timely, appropriate, and effective measures” to prevent and detect fraud, or to pay back users. As with the agreement announced by James, Block accepted the terms of the bureau without admitting or denying any of its facts or legal conclusions.

The inquiry by James and the coalition faulted the company on multiple fronts.

Cash App accounts didn’t require Social Security numbers or dates of birth to create accounts, and there were no limits on how many accounts a person could open — allowing one “bad actor to operate an entire network of scam accounts,” according to the AG’s findings.

The AG’s office said Block targeted unbanked and underbanked consumers, promoting the direct deposit of paychecks and government benefits. Those who relied on Cash App as their primary financial account were especially vulnerable to fraud, the AG’s office said, yet Block grew its customer base without introducing sufficient security measures.

“Because Cash App had no phone number to call for support, users who got locked out of their accounts searched online for a customer service number and often ended up calling fake numbers run by scammers posing as Cash App customer service,” according to the AG’s findings.

James’ office also faulted Block for a social media promotion called “Cash App Fridays” in which it encouraged users to publicly post their unique Cash App identifier information for a chance to win a weekly cash prize. Fraudsters, however, would then contact those users, tell them they had won, then trick them into furnishing their login information.

The coalition inquiry alleged that Block was aware of the scams but kept running the promotion anyway and trained staff to expect defrauded customers to contact them.

According to Business of Apps , Cash App had 59 million active monthly users in 2025 and $7.2 billion in revenues.

Herb is the editor of the Race & Justice unit. Got a tip? Email [email protected] or Signal 917-922-2497.

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