Block, the payments company chaired by Jack Dorsey, has agreed to pay $45 million to settle claims from 46 US states that it mishandled fraud on Cash App, its money-transfer and digital-banking app.

The settlement is the latest sign that state regulators are moving into ground the Consumer Financial Protection Bureau (CFPB) has vacated under the Trump administration.

According to a New York court filing tied to the settlement, Block was accused of telling customers that Cash App carried the security of a traditional bank and that their balances were FDIC-insured, when that protection would apply only if a partner bank failed.

Regulators also said the company lacked effective fraud-prevention procedures and often failed to investigate reports of unauthorised transactions.

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One detail runs through the whole case. Cash App did not offer a live customer-support phone number until 2021, and investigators said the firm had been aware of the gap since 2018. In the meantime, scammers set up fake help lines to trick users into handing over account access.

Texas and Oregon led the investigation, and the $45 million will be divided among the 46 participating states. Texas is due $5 million, Oregon $3 million, and New York roughly $1.6 million, according to state press releases.

Block did not admit wrongdoing, saying it agreed to the judgment “solely for the purpose of concluding this matter.” A spokesperson described the case as “a previously disclosed legacy matter that primarily relates to historical aspects of our business,” and pointed to investments in consumer protection, customer service, and compliance for the tens of millions of people who rely on Cash App.

The app has about 59 million active users, according to Forbes.

The figure should not be confused with earlier penalties. In January 2025, the CFPB ordered Block to pay $175 million over broadly similar failures, made up of $120 million in customer redress and a $55 million fine.

The new court order reaffirms the $120 million redress obligation, which survived even as the administration dismissed many other CFPB actions from the Biden era, including one against the bank-owned app Zelle. With the bureau sharply scaled back this year, coalitions of state regulators have increasingly stepped in to pursue the cases it has dropped, according to Forbes.

Block’s regulatory tab has been mounting. Over the past two years it has drawn more scrutiny than almost any other fintech, including an $80 million multistate fine and a separate $40 million penalty from the New York Department of Financial Services, both tied to anti-money-laundering shortcomings.

As part of the new settlement, Block agreed to build a “comprehensive compliance management system,” stop overstating its fraud protections, keep live phone support available for at least 13.5 hours a day, and respond to complaints about unauthorised transactions within three business days. Several state attorneys general also flagged a commitment to round-the-clock customer service.

The case may matter beyond Cash App. New York Attorney General Letitia James is pursuing Early Warning, the bank-owned operator of Zelle, over allegations that it let fraud spread, and analysts see overlap with the Block claims.

“The large settlement with Cash App makes a negotiated settlement with Zelle more likely, as the basic allegations around fraud risk disclosure and fraud prevention are similar,” said Todd Baker, a senior fellow at Columbia University’s business and law schools.

Early Warning has rejected the claims, telling Forbes that fraud against Zelle users has “always been exceptionally low” and that the lawsuit is “baseless.”

Baker cautioned that the Zelle case could prove harder to win, because the banks that co-own the network, rather than Zelle itself, carry the compliance duties, and the service does not court customers the way Cash App does. The next step there is a ruling on Zelle’s motion to dismiss.