Fintech's Referral Woes: Consent Laws Force $12.5M Cash App Settlement

Block Inc. has agreed to a $12.5 million settlement to resolve a class-action lawsuit over allegations that its Cash App referral program violated Washington state laws by enabling users to send unsolicited text messages. The case, Bottoms v. Block, Inc., accused the company of facilitating the transmission of promotional messages without recipients' prior consent, breaching the state's Commercial Electronic Mail Act and Consumer Protection Act. The settlement, filed in the U.S. District Court for the Western District of Washington, creates a fund to compensate affected users, cover administrative costs, and allocate attorney fees. If approved, eligible recipients could receive payments ranging from $88 to $147, depending on the number of valid claims submitted .

The lawsuit, filed in November 2023 by Washington resident Kimberly Bottoms, alleged that Cash App's "Invite Friends" feature incentivized users to share referral codes via SMS, often without verifying recipients' consent. Example messages included prompts like, "Hey! I've been using Cash App to send money and spend using the Cash Card. Try it using my code and you'll get $5," followed by a referral link. Block, which denied wrongdoing in the settlement agreement, maintained that it complied with all state and federal laws and that the lawsuit was "not well grounded in law or fact" . The company has since reached a separate agreement with the Consumer Financial Protection Bureau (CFPB) over similar issues, though it stated that affected users would be notified directly .

Eligibility for the settlement extends to Washington residents who received a Cash App referral text between November 14, 2019, and August 7, 2025, without having explicitly consented to such messages. Class members must submit claim forms by October 27, 2025, to qualify. Payments will be distributed after court approval, with a final fairness hearing scheduled for December 2, 2025. Recipients who do not act will forfeit their right to claim compensation but will be bound by the court's ruling . The settlement administrator will allocate funds equally among valid claimants, with remaining proceeds potentially redistributed or donated to the Legal Foundation of Washington .

The settlement highlights growing scrutiny of fintech companies' marketing practices. Legal experts note that the case reinforces consumer privacy rights and sets a precedent for holding digital platforms accountable for indirect violations of communication laws. The $12.5 million fund includes $619,500 for administrative costs, up to $3.125 million for attorneys' fees, and a $10,000 service award to the class representative. Payments to claimants will depend on the number of valid submissions, with estimates suggesting payouts between $88 and $147 per person . Analysts emphasize that the settlement underscores the importance of explicit user consent in digital outreach, particularly in referral programs .

Block's response to the lawsuit reflects a broader trend of fintech companies navigating regulatory challenges. While the company denied liability, it acknowledged the need to address concerns about user experience and compliance. The settlement aligns with recent regulatory actions against Block, including a $80 million fine for anti-money laundering deficiencies and a $40 million agreement with New York regulators over Bitcoin transaction compliance . These developments signal a tightening regulatory environment for fintech firms, where innovation must increasingly align with consumer protection and legal standards.

The case also raises questions about the role of user-driven referral systems in digital marketing. Critics argue that platforms like Cash App must ensure robust safeguards against unintended spam, even when users initiate outreach. The settlement's focus on Washington state laws-specifically the requirement for "clear and affirmative consent"-could influence similar lawsuits in other jurisdictions. For now, the outcome serves as a cautionary tale for fintech companies balancing growth strategies with legal and ethical obligations .

[1] Cash App Users to Receive Up to $147 After Settlement, See Who Is Eligible (https://www.cleveland.com/news/2025/10/cash-app-users-to-receive-up-to-147-after-settlement-see-who-is-eligible.html)

[2] Cash App May Owe You Money After Agreeing To (https://www.slashgear.com/1991015/cash-app-12-5-million-dollar-settlement-payout-how-much-can-users-get/)

[3] Block Inc. $12.5M Cash App TCPA Class Action Settlement (https://www.claimdepot.com/settlements/bottoms-text-settlement)