Cash App May Owe You Money in $15 Million Settlement

Current and former Cash App users could be eligible to receive a large portion of a proposed class action settlement from the popular online payments service.

Earlier this year, Cash App Investing and its parent company Block Inc. agreed to pay $15 million to settle a lawsuit that alleged the company “failed to exercise reasonable care” in protecting user information before and after recent data breaches. The class action lawsuit cited two incidents in which access to certain account information was compromised, saying it resulted in numerous unauthorized charges affecting Cash App customers.

Now, these consumers can apply for a settlement payment — which could include up to $2,500 in out-of-pocket losses — before final acceptance. Here’s what you need to know.

Why was Cash App sued?

Cash App and Block, based in Oakland, California, have been sued over their response to security breaches in recent years and allegations that they failed to implement sufficient security measures to protect customers.

The class action lawsuit cited a 2021 incident that the company disclosed in 2022, in which a former employee downloaded the reports of some U.S. users without permission. It also noted another breach disclosed in 2023, in which an unauthorized user accessed some Cash App accounts using phone numbers that were associated with them.

Cash App and Block deny any wrongdoing. However, to settle the lawsuit, they agreed to pay $15 million. In addition to attorney fees and administrative costs, the money will go to affected customers who file eligible claims.

Cash App and Block also agreed to take steps to strengthen data security as part of the settlement. The company did not comment further when contacted by The Associated Press on Friday.

How can I receive compensation payment?

To receive a payment, you must file a claim on the settlement administrator’s official website. The current deadline for filing claims is November 18 — with a final hearing to approve the settlement scheduled for December 16.

Those eligible include current or former Cash App customers who were affected by unauthorized access to their personal information or fraudulent withdrawals between August 23, 2018 and August 20 of this year. You may have received a personalized settlement eligibility notification via mail or email — but if not, you can also manually provide information about your situation online.

How much money can I get?

The amount of compensation will vary depending on the person affected, depending on the eligible losses, as well as the number of people who file a claim.

Class members can potentially receive payment for three types of claims: out-of-pocket losses, lost time, and transactional losses. With documentation, you can receive up to $2,500 in out-of-pocket losses, $25 per hour of lost time (limited to three hours), and additional relief for transactional losses.

However, as the settlement administrator’s website notes, payments could be reduced if there is not enough money in the net settlement fund for each approved claim. If that happens, payments will be reduced proportionally based on each class member’s share of the claim.

What other options do I have?

If you want to exclude yourself from the settlement, class members have the opportunity to “opt out” before November 1. This allows you to file a lawsuit or join another related lawsuit against the defendants in the future. You can also object to the settlement agreement by writing to the court before November 1.

Ultimately, you can choose to do nothing. But if you choose to do nothing, you will not receive any payments and potentially give up your right to file another lawsuit with the claims covered by the settlement.

How can I protect my data in the future?

It can be difficult to completely avoid data breaches in our increasingly digital world, but there are steps consumers can take to protect themselves in the future.

The basics include creating hard-to-guess passwords and using multi-factor authentication when possible. If you receive a breach notification, it’s a good idea to change your password and monitor your account activity for suspicious transactions. You’ll also want to visit the company’s official website for reliable contact information — since scammers sometimes try to leverage news like data breaches to gain your trust with similar phishing emails or phone calls.

Additionally, the Federal Trade Commission notes that nationwide credit bureaus — such as Equifax, Experian and TransUnion — offer free credit freezes and fraud alerts that consumers can set up to protect themselves from identity theft and other malicious activity.

The American Bankers Association and others also recommend extra caution when using payment apps like Cash App, as well as Zelle and Venmo. The safest thing to do is make sure you know who you’re sending money to and avoid any links in unexpected emails, texts or message requests.

Author: WYATTE GRANTHAM-PHILIPS, AP Business Writer