Cash App Class Action Settlement 2024: In a significant move last month, Cash App customers were given the opportunity to claim compensation as part of a $15 million settlement following allegations of inadequate security measures. Customers accused Block and Cash App Investing of negligence in securing user data, leading to unauthorized access and fraudulent transactions. Although the companies denied any wrongdoing, they opted for the settlement to avoid the cost and uncertainties of litigation.
Eligible customers who had experienced unauthorized account access, fraudulent transactions, or dissatisfaction with how their complaints were handled between August 23, 2018, and August 20, 2024, were eligible to claim up to $2,500 for out-of-pocket losses, along with additional compensation for lost time and transaction losses. Claims had to be submitted by November 18, 2024.
Cash App Class Action Lawsuit Overview
The lawsuit primarily focused on several key incidents, including:
- A 2022 security breach when a former Cash App Investing employee accessed sensitive customer data without permission.
- In 2023, unauthorized users gained access to Cash App accounts using recycled phone numbers.
The plaintiffs argued that Cash App’s failure to maintain robust security measures and its inadequate response to customer complaints contributed to significant financial losses and inconvenience for users.
Who is Eligible?
To be eligible for compensation, individuals must meet the following criteria:
- Be a current or former customer of Cash App and/or Cash App Investing, its affiliates, parents, or subsidiaries.
- Had personal information or accounts accessed or obtained without authorization.
- Experienced unauthorized transactions or fraudulent withdrawals, or faced challenges in resolving errors in their accounts or linked financial accounts between August 23, 2018, and August 20, 2024.
Understanding Settlement Benefits
The settlement offers a variety of compensatory benefits for class members, designed to address the financial impact of the security failures.
Monetary Compensation
The $15 million Settlement Fund is allocated to cover the following:
- Legal fees and costs related to the case.
- Service payments to the class representatives.
- Administrative costs of managing the settlement.
- Direct compensation to eligible class members who submit valid claims.
Categories of Compensation
Compensation is broken down into several categories:
- Out-of-Pocket Losses: Eligible claimants can receive up to $2,500 for expenses directly related to the security issues, including credit monitoring, identity theft protection, card replacements, and any bank fees not refunded.
- Lost Time: Claimants can receive reimbursement for up to three hours of time spent dealing with the fallout from security breaches, at a rate of $25 per hour.
- Transaction Losses: Reimbursement for financial losses resulting from unauthorized activities in accounts, which have not been compensated by Cash App, insurance, or other financial institutions.
Pro-Rata Distribution
In the event that the total amount of claims exceeds the available funds, compensation will be distributed on a pro-rata basis, meaning each claimant’s payment will be reduced proportionally. If there are remaining funds after all claims have been paid, the surplus will either be distributed among claimants or donated to a charity.
Cash App Settlement Claim Submission
To be eligible for compensation, claimants needed to submit their claim by the November 18, 2024 deadline. The process was simplified to allow for online submissions, although paper forms were also available for those who preferred to mail their claims. Necessary documentation, such as receipts, police reports, or correspondence, needed to be submitted to support claims.
Cash App Settlement Payment Date: What’s Next for Claimants?
Following the Court’s order on November 7, 2024, the final hearing was rescheduled to January 13, 2025. Once the settlement is approved, the company will issue a confirmation of the payment schedule. Historically, similar tech company settlements have resulted in payments being distributed within 9 to 12 months of the final hearing.
