in Newswire Published on August 24, 2022

Class Action Filed Over Cash App Investing Data Breach Affecting 8.2M Customers [UPDATE]

Last Updated on March 5, 2024

Salinas et al. v. Block, Inc. et al.

Filed: August 23, 2022 ◆§ 4:22-cv-04823

Block, Inc. (formerly Square) and Cash App Investing face a lawsuit over a December 2021 data breach affecting the private information of 8.2 million people.

Defendant(s)

Block, Inc. Cash App Investing, LLC

Law(s)

Illinois Consumer Fraud and Deceptive Business Practices Act California Business and Professions Code California Unfair Competition Law Texas Deceptive Trade Practices Act California Consumer Records Act Illinois Uniform Deceptive Trade Practices Act

State(s)

California

March 5, 2024 – Block, Cash App Investing Data Breach Lawsuit Reaches $15M Settlement

The proposed data breach class action detailed on this page has been settled for $15 million.

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The proposed settlement, if preliminarily approved by the court, will cover current or former customers of Block and/or Cash App Investing, or any of its affiliates, parents or subsidiaries, whose personal information, Cash App account or Cash App Investing account was accessed or obtained without authorization, or who otherwise had unauthorized or fraudulent withdrawals or transfers of funds to or from, or a deficiency in the resolution of an error in, a Cash App account or any linked financial account since August 23, 2018.

The plaintiffs filed a motion detailing the terms of the agreement with Block and Cash App Investing on March 3, 2024. If the deal is ultimately approved by United States District Judge Araceli Martinez-Olguin, the companies will pay $15,000,000 to be divided among class members who submit timely, valid claims.

Per the agreement, eligible class members may file a claim for up to $2,500 in out-of-pocket losses—that is, incurred costs that are supported by documentation and “fairly traceable” to the Cash App data security incident, unauthorized account activity or a deficiency in error resolution in connection with a Cash App account that occurred since August 23, 2018 and that have not already been reimbursed.

In addition, class members may also submit a claim for up to three hours of lost time spent dealing with issues related to these events, at a rate of $25 per hour, the settlement agreement shares.

Finally, the document relays that class members can file a claim for reimbursement of documented “transaction losses,” or costs that were incurred as a result of unauthorized account activity, since August 23, 2018.

According to the plaintiffs’ motion, all payments will be adjusted on a pro rata basis depending on the total number of valid claims, which is estimated to be up to 50,000.

As part of the deal, Block and Cash App Investing have also agreed to implement enhanced data security measures, the agreement says.

Court records indicate that a preliminary approval hearing is scheduled for April 25, 2024. ClassAction.org will update this page if and when the deal receives preliminary approval from the court, and when an official settlement website is launched.

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Block, Inc. (formerly Square) and Cash App Investing, LLC face a proposed class action lawsuit over a December 2021 data breach during which the private information of 8.2 million current and former customers was reportedly compromised.

The 53-page lawsuit says the breach occurred when a former employee, who had access to customer data during his tenure, downloaded without authorization certain reports that included the personally identifiable information of those who used the brokerage platform.

According to the suit, the compromised information included current and former customers’ full names, brokerage account numbers (which are personal identification numbers associated with a user’s stock activity on the Cash App Investing platform), brokerage portfolio value and holdings, and trading activity.

The case claims Block (formerly Square, Inc.) and Cash App Investing were aware of the risk of the unauthorized disclosure of customer information yet failed to take reasonable steps to safeguard the data. The lawsuit says that although the defendants have not disclosed how the former employee gained access to customer information, the breach proves that the sensitive data was maintained “in a condition vulnerable to misuse.”

“While the exact reason(s) for the Data Breach remain unclear, there is no doubt that Defendants failed to adequately protect Plaintiffs’ and Class members’ Private Information and such negligent failures resulted in the injuries alleged herein,” the complaint states, stressing that data breach victims now face a heightened risk of identity theft and fraud.

The lawsuit relays that although Block discovered in mid-December 2021 that the former employee had gained access to customers’ personally identifiable information, the company waited another four months before announcing the breach in a regulatory filing with the Securities and Exchange Commission (SEC). Per the case, Block disclosed that Cash App Investing would be contacting roughly 8.2 million consumers whose information was affected.

According to the lawsuit, Block offered no explanation for the delay in notifying victims, which has caused them to experience harm “they otherwise could have avoided had a timely disclosure been made.”

Moreover, the defendants’ notice to data breach victims was “not just untimely but woefully deficient,” the lawsuit says, as the document lacked key details such as how the former employee was able to access customer information, whether the data was encrypted or otherwise protected, or how Block learned about the breach. According to the case, the defendants have failed to offer any credit or identity theft monitoring services to those whose information was compromised.

The lawsuit looks to represent anyone whose private information was compromised because of the Cash App Investing data breach.

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