Cash App Users Could Receive Compensation from $15 Million Settlement Fund

If you’ve used Cash App, you might be entitled to a portion of a $15 million settlement resulting from a lawsuit against the mobile payment service.

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Earlier this year, Cash App Investing and its parent company, Block Inc., agreed to settle a class-action lawsuit for $15 million. The lawsuit alleged that the company did not adequately protect user data, leading to multiple breaches. These incidents resulted in unauthorized charges on users' accounts. Now, affected users can submit a claim to potentially receive compensation, including up to $2,500 for any out-of-pocket expenses.

The Reason Behind the Lawsuit Against Cash App

Cash App and its parent company, Block Inc., were sued due to their response to security breaches. The lawsuit claimed that the company failed to implement adequate security measures to protect user data, leading to two significant breaches. The first breach occurred in 2021, but it wasn’t disclosed until 2022, when it was revealed that a former employee had accessed sensitive user information without authorization. The second breach, which was made public in 2023, involved unauthorized access to Cash App accounts through linked phone numbers.

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While Cash App and Block Inc. denied any wrongdoing, they agreed to settle the lawsuit by paying $15 million. After deducting legal fees and administrative costs, the remaining funds will be distributed among eligible users who file valid claims. As part of the settlement, the company also committed to enhancing its data security to prevent future breaches.

How to Claim Your Share of the Settlement

To receive a payment from the settlement, you must file a claim on the official settlement administrator’s website by November 18. The final approval hearing for the settlement is scheduled for December 16.

Current and former Cash App users who experienced unauthorized access to their personal information or fraudulent withdrawals between August 23, 2018, and August 20, 2023, may be eligible for compensation. If you did not receive a personalized notice about the settlement, you can still submit a claim by providing the necessary details online.

Potential Compensation You Can Receive

The amount of compensation you may receive depends on your documented losses and the number of claims filed. Eligible claims include out-of-pocket losses, compensation for lost time, and transaction-related losses. With proper documentation, you could receive up to $2,500 for out-of-pocket expenses, $25 per hour for lost time (up to three hours), and additional compensation for transaction-related losses.

However, if the settlement fund is insufficient to cover all approved claims, payments may be reduced proportionally based on the number of valid claims submitted.

What Are Your Options Besides the Settlement?

If you prefer not to participate in the settlement, you can opt out by November 1. This allows you to pursue your own legal action or join another lawsuit related to the same issues. Alternatively, you can file an objection to the settlement by submitting a written statement to the court before November 1.

If you choose not to take any action, you won’t receive any settlement payment and may lose the right to sue over claims included in this settlement.

Protecting Your Data Moving Forward

Completely avoiding data breaches is difficult, but there are steps you can take to protect your personal information. Use strong, unique passwords for each of your online accounts, and enable multifactor authentication whenever possible. Regularly monitor your accounts for unusual activity, and if you’re notified of a breach, immediately change your password and review your account history for any suspicious transactions. Always ensure you’re using official company channels to avoid phishing scams.

The Federal Trade Commission recommends setting up free credit freezes and fraud alerts with credit bureaus like Equifax, Experian, and TransUnion. These measures can help protect you from identity theft and other fraudulent activities. The American Bankers Association also advises being cautious when using payment apps like Cash App, Zelle, and Venmo. Always verify the identity of the person you’re sending money to, and avoid clicking on links in unexpected messages, as they could be phishing attempts designed to steal your information.

Companies Strengthen Security in Response to Data Breaches

The Cash App settlement highlights the growing need for stronger data security measures among companies that handle sensitive user information. Many businesses are now investing in advanced cybersecurity technologies, conducting regular security audits, and providing ongoing training for employees. These efforts aim to protect against data breaches, but consumers must remain vigilant and take steps to safeguard their personal information.

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