A $15 million settlement has made it possible for Cash App users to request reimbursement after the company was accused of not putting in place adequate security measures to safeguard user data. The plaintiffs asserted that data breaches, fraudulent transactions, and illegal access resulted from Block and Cash App Investing’s carelessness in protecting client accounts. Despite their denials of any misconduct, the firms decided to settle to avoid the costs and dangers of protracted legal action.
In addition to additional compensation for lost time and transaction-related damages, eligible customers who suffered fraudulent transactions, unauthorized access, or unsatisfactory responses to their complaints between August 23, 2018, and August 20, 2024, may be eligible to receive up to $2,500 in reimbursement for out-of-pocket losses. Those who had inadequate customer service or security breaches are also covered by the compensation. The official settlement website has additional information on how to file, and claims must be received by November 18, 2024.
Cash App Class Action Lawsuit
Michelle Salinas, Raymel Washington, and Amanda Gordon filed a combined class action complaint against Block, Inc. (previously Square) and its subsidiary Cash App Investing, which resulted in this settlement. The lawsuit came after claims that a former Cash App employee had inappropriately accessed customer account data in 2022 and that further unauthorized access had taken place in 2023, mostly through the reuse of phone numbers. The plaintiffs claimed that Block and Cash App Investing were negligent in their security procedures, failing to put in place the required safeguards for user data, which led to fraud and poor customer service.
Block and Cash App Investing have stated they did nothing wrong but chose to settle the case to avoid prolonged legal proceedings and potential uncertainties. The settlement provides financial compensation and includes measures to strengthen security, aiming to resolve the concerns raised by the plaintiffs. This outcome reflects the growing pressure on tech companies and financial platforms to protect customer data, especially with the increasing frequency of data breaches and security issues in the digital finance world.
Claims of Security Flaws and Breach Concerns
Several security incidents were brought to light by the lawsuit against Cash App:
- 2022 Security Flaws: A major data breach occurred when a former Cash App employee obtained important client information without authorization. Numerous users’ personal information, including financial information, was made public by this incident and is reportedly being exploited.
- 2023 Security Concerns: In a different incident, Cash App had flaws that made it possible for unauthorized users to access accounts by using phone numbers that had been recycled, thus jeopardizing user security.
The plaintiffs contend that these security flaws demonstrated Cash App’s inability to keep up proper cybersecurity safeguards and promptly respond to consumer complaints about illegal transactions. They claim that the company’s failure to protect consumer information and address problems quickly caused substantial financial losses, psychological suffering, and inconvenience for impacted clients.
Purpose and Aims of the Settlement
The settlement’s main goal is to compensate impacted consumers financially while guaranteeing the installation of strong security measures to stop similar incidents in the future. In addition to committing to better data protection practices going the future, this agreement attempts to repair the harm done to users and rebuild trust. Furthermore, the settlement effectively settles the matter without the need for drawn-out litigation, sparing the defendant and plaintiffs from high legal fees, lengthy court proceedings, and the uncertainty of a trial. The goal of the resolution is a just conclusion that upholds accountability and corporate responsibility while defending the rights of those impacted.
Eligibility Criteria
A Settlement Class member includes individuals who:
- Are current or former customers of Cash App or Cash App Investing?
- Have experienced unauthorized access to their personal information, Cash App account, or Cash App Investing account due to a data breach, hacking, or other forms of illegal access.
- Between August 23, 2018, and August 20, 2024, you may have had illegal or fraudulent transactions to or from your Cash App or Cash App Investing account and mistakes relating to such transactions that were not properly resolved.
- We encountered unsolved errors that resulted in financial losses, such as transaction disputes, unauthorized fund transfers, account access issues that were not adequately addressed during the relevant period, or difficulties with Cash App’s security standards.
Understanding Compensation
To address the various damages stemming from the alleged security failings, the settlement provides class members with various compensation options.
Monetary Compensation
The $15 million that has been allocated to the Settlement Fund will be disbursed in the following ways:
- Reimbursement for legal bills and costs.
- The representatives of the class received service honors.
- Expenses related to the settlement’s administration.
- Direct payouts to participants in the class who timely and legitimately file claims.
Guidelines for Compensation Following Security Incidents:
- Out-of-Pocket Losses: Up to $2,500 in reimbursement may be given to qualified claimants for costs directly associated with security events. Credit monitoring services, identity theft protection, credit freezes, payment card replacement, and other bank fees (like overdraft charges) that are not refunded by the bank or financial institution can all be included in this.
- Lost Time: For $25 per hour, claimants are eligible to receive compensation for up to three hours of lost time spent dealing with the fallout from security breaches. This includes things like getting in touch with financial institutions, protecting personal accounts, and taking any other necessary steps to put an end to the situation.
- Transaction Loses: Documented financial losses that are directly caused by unauthorized activity on an individual’s account may be reimbursed. This covers financial losses not previously covered by insurance companies, other financial institutions, or programs like Cash App.
Pro-Rata Distribution
Payments to each claimant will be adjusted proportionately to provide an equitable distribution of money if the total number of valid claims exceeds the available Net Settlement Amount. However, if the claims exceed the available funds, any excess money will either be given to the claimants in proportion to their initial claims or, if it is thought suitable, donated to a specified charity or organization. The circumstances and the rules specified in the settlement agreement will determine the precise allocation mechanism.
How to File a Claim for the Cash App Settlement?
Eligible class members have until November 18, 2024, to file a claim form to receive benefits from the settlement. For individuals who would rather mail their forms, the claim procedure is made to be easy to use and accessible both online and through paper submissions. It is essential to provide any required supporting documentation, such as police reports, invoices, or other proof of losses and the steps taken to address them, to guarantee that your claim is taken into consideration.
Process of Claim
- Verify Eligibility: Make sure you meet the eligibility requirements by carefully reading the settlement terms.
- Gather Records: Collect all the necessary paperwork to back up your claim, such as bank statements, invoices, and any official reports or letters attesting to the losses and your efforts to address them.
- Complete the Claim Form: Before the deadline, accurately complete the Claim Form, attach the necessary supporting papers, and send it in by mail or online.
To increase your chances of profiting from the settlement, make sure your filing is timely and thorough.
Additional Details and Resources
Claimants can contact the Cash App Security Settlement Administrator at the official phone number or mailing address listed below for more information about the settlement or for more help. After filing a claim, claimants must promptly update their contact details if they change. This guarantees that they get any settlement-related updates or qualified compensation.
An important first step in resolving the purported security flaws with Cash App is this settlement. It highlights the vital significance of robust security measures and prompt customer service in the digital payments sector while providing impacted users with a methodical way to seek monetary compensation.
FAQs
Q1: How will the compensation be distributed?
Ans: Payments will be distributed on a pro-rata basis depending on the number of valid claims filed.
Q2: Can I opt out of the settlement?
Ans: Yes, you can choose to opt-out if you prefer to pursue your legal action.