Cash App, widely used for transactions among friends, family, and businesses, may soon be offering some users cash rewards following a proposed $15 million settlement arising from a lawsuit regarding the app’s handling of security breaches. The app, which facilitates sending and receiving money, stock investments, bitcoin purchases, and payments to certain merchants, could provide over $2,500 to eligible users who encountered security issues over the last six years.
The class-action lawsuit claims that Cash App Investing and its parent company, Block, were negligent in their responses to two data breaches, accusing them of insufficient security measures and inadequate handling of user complaints about fraudulent transactions. The lawsuit cites a 2021 incident where a former employee accessed reports of U.S. users without authorization, as well as a 2023 breach involving unauthorized access to accounts.
Many affected users reportedly incurred losses of up to $40,000. One plaintiff, Michelle Salinas, mentioned spending more than 100 hours addressing the fallout from her compromised account. While Block and Cash App deny any wrongdoing, they have agreed to the settlement without admitting liability, and they have yet to issue a response to comments regarding the lawsuit.
Eligibility for settlement payments extends to current or former users whose personal data or accounts were accessed without permission, those who have experienced fraudulent transactions, or those who faced issues with error resolution during the period from August 23, 2018, to August 20, 2024.
Block and Cash App will establish a $15 million settlement fund for eligible customers, with payments distributed after covering legal and administrative fees. If the claims exceed the available funds, payouts will be adjusted proportionally based on the total amount claimed. Payments will be classified under three categories: out-of-pocket losses, lost time, and transaction losses.
Eligible customers may claim up to $2,500 for out-of-pocket losses, which encompasses unrefunded fees and costs for credit monitoring or identity theft protection. Time spent resolving issues related to unauthorized transactions or deficiencies in Cash App’s service may be reimbursed at $25 per hour, up to three hours. Users can also file claims to recover funds lost in unauthorized transactions.
To submit a claim, eligible Cash App users must complete a claim form by November 18, either online or by mail. A final approval hearing for the proposed settlement is scheduled for December 16.
While Cash App promotes its security measures, highlighting encryption and fraud detection technology on its site and maintaining an A-plus rating from the Better Business Bureau, customer reviews indicate a mixed experience, averaging only 1.11 out of 5 stars. Additionally, the Consumer Financial Protection Bureau has warned consumers about the risks of storing money in payment apps, noting that these funds are not automatically protected by the government, raising concerns about potential losses in the event of company failures.