Everyone’s favorite digital wallet might owe you money. Cash App, a peer-to-peer payment platform, has been forced to compensate its users for security flaws by paying damages. Block, the app’s parent company, will pay out $175 million to its users.
The Cash App, as the name implies, is an application that allows you to transfer money in a variety of ways. After creating an account, users can use the platform for almost anything related to finance.
In addition to sending and receiving money, users can apply for loans, pay taxes, and invest in Bitcoin or stocks. The payment platform also offers a prepaid cash card, which users can use to withdraw money from ATMs and make purchases.
Cash App will refund $120 million to its customers for this reason
The Consumer Financial Protection Bureau (CFPB), an independent federal agency, ordered Block, Cash App’s parent company, to refund $120 million to Cash App users last week.
In addition, the corporation is expected to contribute $55 million to the Consumer Financial Protection Bureau’s Civil Penalty Fund. The goal of this fund is to provide assistance to victims of businesses that violate federal consumer financial protection regulations.
Block was legally obligated to investigate and resolve issues involving illegal transactions, but he did not. According to the CFPB’s investigation, Block did not attempt to address the issue on its own, instead advising customers who suffered losses to request that their banks reverse the charges.
It is alleged that Cash App used deception in its terms of service to avoid its investigation responsibilities. The Terms of Service lead users to believe that any complaints are the responsibility of their associated banks. Furthermore, the Bureau alleges that Block failed to provide its customers with “meaningful and effective customer service.”
Although there is a phone number on the back of the Cash Card, for many years, customers could only contact customer service through the app or US mail. Although Block has denied the allegations and referred to them as “mischaracterizations,” the company has agreed to comply with the CFP’s directives to reimburse its customers.
The Consumer Financial Protection Bureau (CFPB) announced that users will receive compensation without having to do anything. Instead, the agency will verify payments and identify users. USA Today has identified the following users as eligible:
- Customers who were entitled to refunds for fraudulent transactions but did not receive them.
- Customers whose accounts had transactions or unlawful transfers that Cash App and Block failed to sufficiently look into.
- Customers whose accounts were consequently locked.
- Customers who were not given provisional credits while inquiries were delayed.
The courts have identified two initial options for fund delivery. These include Cash App credit payments made to users who have used the app in the previous six months, as well as non-credit payments made to users who have not transacted on the app during that time period.
Block has been directed to provide live, round-the-clock customer service and investigate any illegal transactions in addition to the payment. According to a statement released by Block, the current Cash App experience does not reflect the historical concerns raised in this agreement.
Furthermore, the statement claims that Cash App offers a variety of ways for users to contact customer service. Customer service, according to Cash App, is available via live phone calls, email, “real-time” in-app messaging, and an app-based dispute reporting facility.
The software also employs strong security features for accessing the mobile app, such as facial recognition, machine learning, and sophisticated detection systems (artificial intelligence).
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