Cash App Settlement: $12.5 Million Payout For Unwanted Texts

Case Overview: Cash App's parent company, Block Inc., has agreed to a $12.5 million settlement to resolve a class action lawsuit alleging the mobile payment service sent unsolicited promotional texts to users' contacts without permission.

Consumers Affected: Washington state residents who received unwanted text messages from Cash App's "Invite Friends" referral program between November 2019 and a date to be determined by the settlement administrator.

Court: U.S. District Court for the Western District of Washington

Washington state residents who received unwanted text messages from Cash App's "Invite Friends" referral program could be eligible for payments between $88 and $147 as part of a $12.5 million class action settlement.

Kimberly Bottoms served as the lead plaintiff in the class action lawsuit against Block Inc., Cash App's parent company, claiming the mobile payment service violated state laws by sending unsolicited promotional texts to users' contacts without permission.

The settlement covers nearly 2 million phone numbers with Washington area codes that received these unwanted messages between November 2019 and a date to be determined by the settlement administrator.

Cash App's Referral Program Accused of Violating Privacy Laws

Cash App's "Invite Friends" feature allowed users to earn rewards by referring new customers to the payment service, but the lawsuit claimed this program went too far by automatically sending text messages to people who never agreed to receive them. When users shared their contact lists with Cash App, the company allegedly sent promotional messages to those contacts without getting their consent first.

These automated text messages promoted Cash App's services and encouraged recipients to download the app and create accounts, but many people who received them had never signed up for any communications from the company. The messages typically included referral codes and incentives for new users to join the platform.

Bottoms argued that this practice violated Washington's Commercial Electronic Mail Act and the state's Consumer Protection Act, both of which require companies to get permission before sending promotional messages to consumers. The lawsuit claimed that Cash App knew these messages were unwanted but continued sending them anyway to grow its user base.

The referral program generated thousands of complaints from Washington residents who received multiple unwanted messages and couldn't easily stop them from coming, according to the legal filing.

Settlement Terms Provide Payments for Affected Residents

Under the agreement reached in June 2024, Block Inc. will establish a $12.5 million fund to compensate affected Washington residents, with class counsel estimating individual payments will range from $88 to $147 per person. These amounts represent between 17% and 29% of the $500 statutory damages allowed under Washington law for each violation.

The final payout amounts depend on how many people submit valid claims, since payments will be distributed on a pro rata basis among all approved claimants. This means if fewer people file claims, individual payments could be higher than the estimated range.

Settlement funds will also cover administration costs, attorney fees, and a service award for the class representative who brought the case. Class members can choose to receive their payments via traditional check or electronic transfer through services like Venmo or PayPal.

Block Inc. has denied any wrongdoing but agreed to the settlement to resolve the claims and avoid the costs and uncertainty of continued litigation.

Who Qualifies for Cash App Settlement Payments

The settlement class includes individuals who held phone numbers with Washington state area codes and received Cash App referral program text messages during the specified time period. Class counsel estimates this covers nearly 2 million phone numbers, though not all of these may represent unique individuals since some people have multiple phone numbers.

To qualify for payment, recipients must have been Washington residents when they received the unwanted text messages. The settlement administrator will identify eligible phone numbers and send notice to potential class members through email and postcard mailings.

An online publication notice campaign will also target people who cannot be reached through direct mail, ensuring as many eligible recipients as possible learn about their right to file claims.

Cash App Faces History of Legal and Regulatory Challenges

This settlement represents the latest in a series of legal and regulatory problems for Cash App and its parent company Block Inc. In January 2024, the Consumer Financial Protection Bureau ordered Cash App to pay $175 million to resolve allegations about inadequate customer service and fraud protection.

The mobile payment service also agreed to a $15 million settlement in 2023 to resolve claims related to a data breach that occurred in 2022 and 2023, affecting millions of users' personal information. These incidents have raised concerns about Cash App's privacy and security practices.

Trend of Lawsuits Over Unwanted Text Message Marketing

The Cash App settlement reflects a broader pattern of legal challenges facing companies over unwanted text message marketing campaigns that violate consumer protection laws. Several major brands have recently faced similar lawsuits over unsolicited promotional messages.

Crumbl Cookies faced complaints earlier this year about sending promotional texts to customers who had opted out of communications, with the lawsuit claiming the bakery chain ignored multiple requests to stop sending messages. These cases typically involve violations of the Telephone Consumer Protection Act or state consumer protection laws.

Snapchat also dealt with legal challenges over allegedly sending unsolicited marketing texts to numbers on the federal Do-Not-Call Registry, with plaintiffs claiming the social media company used these messages to drive app downloads and increase its user base.

Cash App Spam Texts Settlement Administration and Timeline

The Cash App settlement still requires final court approval before payments can be distributed to class members, with the judge reviewing the terms to ensure they're fair and reasonable for affected consumers. Once approved, the settlement administrator will begin the claims administration process.

Eligible recipients will receive detailed instructions about how to submit their claims and what documentation, if any, they need to provide. The settlement website will contain claim forms and frequently asked questions once it becomes available.

Class members who disagree with the settlement terms have the right to object or opt out of the agreement, though doing so would forfeit their right to receive settlement payments. The court will consider any objections before deciding whether to give final approval.

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Case Details

• Lawsuit: Bottoms v. Block Inc.
• Case Number: 2:23-cv-01969-MJP
• Court: U.S. District Court for the Western District of Washington

Plaintiffs' Attorney:

• Beth E. Terrell, Jennifer Rust Murray and Eden B. Nordby (Terrell Marshall Law Group PLLC)
• Sophia M. Rios, E. Michelle Drake and Colleen Fewer (Berger Montague PC.)

Did you receive unwanted text messages from Cash App's referral program? Share your experience below.