Block has agreed to pay $45 million to 46 U.S. states over how it handled fraud on Cash App, its money-transfer and digital-banking app with 59 million active users. The action is another sign that states are stepping up financial enforcement as the Consumer Financial Protection Bureau (CFPB) has pulled back under the Trump Administration. And it may shed light on a pending New York case involving alleged fraud on Zelle.

In a New York State court filing tied to the $45 million settlement announced today, Block was accused of a range of infractions, such as misrepresenting that Cash App had the security of a traditional bank, misleading customers that their balances were FDIC-insured, failing to have effective fraud-prevention procedures and neglecting to investigate consumers’ reports of unauthorized transactions.

Cash App didn’t have an active customer-support phone number until 2021–before then, a published customer-service number merely included a pre-recorded message directing users to its app for support.

Texas and Oregon led the investigation, according to press releases. The........

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