A popular smartphone app used for sending and receiving money will pay nearly $22 million to settle investigations regarding fraudulent unemployment benefit deposits and failures to protect consumers from fraud. 

Block, the company behind Cash App, will pay $20 million to resolve issues over how it handled fraudulently transferred unemployment deposits into Cash App accounts from the state’s Employment Security Department during the Covid-19 pandemic, according to a release. 

Another $1.8 million will be paid to Washington state as part of a multi-state $45 million settlement over allegations Block misled consumers about Cash App’s safety, failed to protect users from fraud, and did not meet its own promises and legal obligations to consumers. 

“Block presented Cash App as a safe alternative to a traditional bank but failed to create the robust protections and safeguards that Washington law requires,” Washington Attorney General Nick Brown said in a statement. “This is further notice that our office will fight back to protect consumers and taxpayers and hold financial companies accountable when they engage in deceptive practices.” 

Starting in August 2020, the AGO began investigating Washington’s loss of more than $648 million of Washington state unemployment benefits were lost due to fraud and identity theft during the COVID-19 pandemic.  

Investigators claim between March and August 2020, at least $22 million in unemployment benefits were fraudulently transferred through Cash App accounts from criminals applying for benefits using Washingtonians’ stolen personally identifiable information. The Attorney General’s Office alleged Cash App failed to maintain anti-fraud control to detect those suspicious transfers. 

The multistate settlement reaffirms Block’s commitment to distribute between $75 million and $120 million to compensate consumers nationwide as part of a settlement with the Consumer Financial Protection Bureau. Despite assuring its users their money was safe, “implying that the app worked like a bank with the same protections,” prosecutors alleged the company knew fraud was prevalent partially because of the app’s policies and practices.