(Reuters) -The Consumer Financial Protection Bureau (CFPB) on Thursday ordered payments firm Block to pay a penalty citing fraud and weak security protocols on its mobile payment service Cash App.
The regulator said Block deprived Cash App users of meaningful and effective customer service and left the network vulnerable to criminals defrauding users.
The move is one of the final regulatory actions under the Biden administration as Washington awaits the inauguration of President-elect Donald Trump.
Billionaire Elon Musk, who is slated to co-head a new government agency to slash government spending, has called for the elimination of the CFPB.
The order includes up to $120 million in redress to consumers and a $55 million penalty to be paid into the CFPB’s victim relief fund.
“Cash App created the conditions for fraud to proliferate on its popular payment platform,” said CFPB Director Rohit Chopra in a statement.
Block said the issues raised by the CFPB were “historical” and did not “reflect the Cash App experience today.”
“While we strongly disagree with the CFPB’s mischaracterizations, we made the decision to settle this matter in the interest of putting it behind us and focusing on what’s best for our customers and our business,” the company said.
On Wednesday, Block also agreed to pay $80 million to a group of 48 state financial regulators after the agencies determined the company had insufficient policies for policing Cash App.
(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Tasim Zahid)
