Block pays fine due to security vulnerabilities in Cash App

The U.S. Consumer Protection Agency 'Consumer Financial Protection Bureau' (CFPB) has ordered the payment company Block to pay a fine. The reason for the measure is fraud incidents and inadequate security standards in the mobile payment service Cash App. According to the CFPB, Block failed to provide Cash App users with meaningful and effective customer service, thereby opening the door for criminals. This decision marks one of the last regulatory actions under the Biden administration, as Washington awaits the inauguration of President Trump. Elon Musk, who is set to become co-leader of a new government agency dedicated to reducing government spending, has called for the dissolution of the CFPB. The resolution includes compensation of up to 120 million US dollars for consumers and a fine of 55 million US dollars to be paid into the CFPB's victim assistance fund. CFPB Director Rohit Chopra stated in a declaration, 'Cash App created conditions that allowed fraud to spread on its popular platform.' Block, however, stated that the issues raised by the CFPB were historical and did not reflect the current experience with Cash App. Although Block strongly disputes the CFPB's representations, the company decided to settle the dispute in the interest of focusing on its customers and business. Additionally, Block agreed to pay 80 million US dollars to a group of 48 state financial regulators after it was found that the policies to control Cash App were inadequate.