By Wyatte Grantham-Philips | Associated Press
Current and former Cash App users could be entitled to a significant portion of a proposed class action settlement brought by the popular online payment service.
Earlier this year, Cash App Investing and its parent company Block Inc. agreed to pay $15 million to settle a lawsuit alleging that it did not exercise “sufficient care” in protecting user information before and after recent data breaches. The class action lawsuit cited two incidents in which access to some account data was compromised, leading to numerous unauthorized withdrawals from Cash App customers.
Now, those consumers can apply for a settlement payment that could include reimbursement of up to $2,500 in cash losses before final approval. Here’s what you need to know.
Why was Cash App sued?
Cash App and Oakland-based Block have been sued over their handling of security breaches in recent years and allegations that they did not take adequate security measures to protect customers.
The class action lawsuit related to a 2021 incident that the company disclosed in 2022, in which a former employee downloaded reports from some U.S. users without permission. It also mentioned another breach disclosed in 2023, when an unauthorized user accessed some Cash App accounts using phone numbers associated with them.
Cash App and Block have denied any wrongdoing. However, to settle the dispute, they have agreed to pay $15 million. Aside from legal and administrative fees, this money will go to affected customers who have legitimate claims.
Cash App and Block also agreed to take steps to improve data security as part of the settlement. The company did not provide further comment to The Associated Press on Friday.
How can I get severance pay?
To receive a payment, you must submit a claim on the official settlement administrator’s website. The current deadline to submit a claim is November 18 – the final hearing to approve the settlement is scheduled for December 16.
Current or former Cash App customers who were affected by unauthorized access to their personal information or fraudulent withdrawals between August 23, 2018 and August 20 of this year are eligible. You may have received a personal notification in the mail or email informing you of your eligibility for the settlement. If not, you also have the option of manually providing information about your situation online.
How much money can I get?
The amount of compensation varies from person to person and depends on the losses eligible for compensation – and also on how many people ultimately make a claim.
Class action participants may be able to recover compensation for three types of claims: cash payouts, lost time, and transaction losses. With proper documentation, you may be able to recover up to $2,500 in cash payouts, $25 per hour for lost time (up to a maximum of three hours), and additional compensation for transaction losses.
However, the Settlement Administrator’s website states that payments could be reduced if there is not enough money in the Net Settlement Fund for each approved claim. Should this be the case, payments will be reduced proportionately, based on the share of each member of the class’s claim.
What other options do I have?
If you wish to opt out of the settlement, class members will have the opportunity to opt out of the settlement before November 1. This will allow you to later sue the defendants or participate in another related action. You may also object to the settlement in writing before November 1.
Finally, you can choose to do nothing. However, if you choose inaction, you will not receive any payments and may also give up the right to file another lawsuit with claims covered in the settlement.
How can I protect my data in the future?
In our increasingly digital world, it can be difficult to avoid data breaches entirely, but there are some steps consumers can take to protect themselves in the future.
The basics include creating hard-to-guess passwords and using multifactor authentication when possible. If you receive a data breach notification, you should change your password and monitor your account activity for suspicious transactions. You should also visit a company’s official website to get reliable contact information – because scammers sometimes try to exploit news like data breaches to gain your trust through fake phishing emails or phone calls.
In addition, the Federal Trade Commission notes that nationwide credit reporting agencies – such as Equifax, Experian and TransUnion – offer free credit freezes and fraud alerts that consumers can set up to protect themselves from identity theft and other malicious activity.
The American Bankers Association and others also urge caution when using payment apps such as Cash App, Zelle and Venmo. The safest way to do this is to confirm you know who you’re sending money to and avoid links in unexpected emails, texts or message requests.
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