Block Inc. Settles $12.5 Million Cash App Referral Lawsuit Settlement in Washington

Block Inc., the parent company of Cash App, has agreed to a $12.5 million settlement over allegations of sending unsolicited spam texts through its "Invite Friends" referral program, potentially violating consumer protection laws in Washington state. This legal resolution follows a class action lawsuit filed by Washington resident Kimberly Bottoms, claiming the messages contravened the Washington Consumer Electronic Mail Act and the Washington Consumer Protection Act.

Cash App, initially launched as Square Cash in 2013, has since evolved into a prominent digital payment service with around 57 million monthly active users as of 2024. Although Block Inc. has not admitted any wrongdoing, it agreed to the settlement last month to address the concerns raised by the allegations.

The settlement is specifically relevant to Washington state residents who received the disputed spam messages, with eligibility dependent on having received such texts during the settlement period, which began on November 14, 2019, and will conclude at a date yet to be determined. The settlement class is estimated to comprise approximately 2 million people, based on available phone number data, indicating a significant number of potentially affected individuals.

Block Inc. is expected to initiate outreach efforts by sending emails and physical letters to notify eligible individuals, thereby allowing them to participate in the settlement. To be eligible for compensation, individuals must file their claims within the yet-to-be-announced submission period. The anticipated compensation per claimant is projected to range between $88 and $147, contingent upon the number of valid claims submitted.

While specific mechanisms for opting into the settlement are currently unavailable, potential claimants are advised to remain vigilant for forthcoming details on the claims process and important deadlines. This case marks another instance where Block Inc. has settled legal challenges. Last year, the company allocated $15 million to resolve a class action lawsuit over unauthorized data access by an employee. Furthermore, Block faced $175 million in penalties from the Consumer Financial Protection Bureau due to inadequate security measures that risked user data.

This settlement exemplifies Block Inc.’s strategic effort to resolve claims without admitting liability, ensuring compliance with consumer protection laws while maintaining its position as a key player in the digital payments sector. As the settlement progresses, affected parties should monitor ongoing announcements to ensure timely compliance with the notification and claims process.