Cash App Settlement: Block Agrees to $12.5 Million Over Spam Text Allegations

Block, the parent company of Cash App, has agreed to a $12.5 million settlement following accusations of violating consumer protection laws through a referral program that allegedly spammed users with unsolicited text messages. Although the company did not admit any wrongdoing, the settlement provides an opportunity for affected users to receive compensation for the messages they received.

Initially launched as Square Cash in 2013, Cash App has evolved over the last decade into a significant player in the digital payment landscape, especially among lower-income demographics. With approximately 57 million monthly active users and substantial revenue, Cash App is in a position to fulfill various legal obligations resulting from such settlements.

This is not the first settlement Cash App has engaged in recently. Last year, the company paid $15 million in response to a lawsuit over an alleged unauthorized data access by an employee. Additionally, the Consumer Financial Protection Bureau imposed $175 million in refunds and fines on Block due to inadequate security protocols that exposed users to fraud risks.

The current suit was filed by Washington state resident Kimberly Bottoms, who alleged the spam messages violated the Washington Consumer Electronic Mail Act and the Washington Consumer Protection Act. The messages were reportedly sent through Cash App's "Invite Friends" referral program. Block has agreed to settle the lawsuit, with the motion for approval submitted to the Washington state federal court system.

The settlement specifically applies to Washington state residents covered under the mentioned consumer protection laws who received spam messages from Cash App. An estimated class size of 2 million individuals based on phone number data suggests a substantial outreach effort is forthcoming. These potential claimants will soon receive notifications via email and physical letter regarding their eligibility for settlement participation.

Though methods for opting into the settlement are not yet available, details will be provided as the process unfolds. At present, no deadline for joining the settlement has been established, but a timeframe for submission is anticipated based on the settlement's guidelines requiring timely claims.

The compensation amount per class member is projected to fall between $88 and $147, depending on the number of opt-ins received. This prediction is derived from the settlement sum agreed upon by Block and the estimated number of eligible participants.

As further developments occur, interested parties should remain attentive for announcements regarding the settlement timeline and opt-in procedures.