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FTC Probes Block Over Frozen Customer Funds
8 Oct
Summary
- FTC investigates Block over alleged violation of consumer protection laws.
- Customers report frozen accounts with up to $2.5 million inaccessible since 2022.
- Block maintains ongoing dialogue with FTC staff regarding document production.
The Federal Trade Commission (FTC) is investigating Block, the company behind Square and Cash App, for potential violations of consumer protection laws. This investigation began last year following over 1,500 consumer complaints and centers on allegations of inadequate assistance provided to customers experiencing frozen or deactivated accounts. Court filings revealed that customers have been unable to access funds totaling up to $2.5 million since 2022, even after completing verification processes.
Block has stated its commitment to cooperating with the FTC, noting that it has been actively working with agency staff to provide remaining requested documents. The company expressed its dedication to resolving the matter constructively. Separately, Block previously announced significant workforce reductions, partly attributed to AI integration, a move that faced scrutiny from critics who questioned the scale of layoffs and the AI narrative.
Despite these regulatory inquiries and past workforce changes, Block reported strong financial performance in the second quarter. The company achieved 25% gross profit growth year-over-year, reaching $3.17 billion. Both Cash App and Square segments contributed positively, with Cash App's gross profit growing 31% and Square's growing 13%.
