Cash App has faced several issues recently and historically, including technical problems and serious concerns about security and customer service.
Technical Issues
- There have been reports of connection issues affecting logins and account creation for Android users, caused by a third-party service provider, leading to delays and outages
- Past incidents included problems with Cash App Cards, delayed peer-to-peer payments, and adding cash, which have been resolved
- Currently, no widespread problems are reported by users on outage tracking sites, indicating intermittent rather than persistent technical issues
Security and Fraud Concerns
- The Consumer Financial Protection Bureau (CFPB) fined Cash App's operator, Block, $175 million for weak security protocols that put users at risk. The company was found to have inadequately investigated unauthorized transactions and misled users into thinking disputes were their bank's responsibility, which is against legal requirements
- Cash App users have reported difficulties getting refunds for fraudulent transactions, with the company often denying claims and providing poor customer service. The CFPB highlighted that Cash App's customer support was largely inaccessible by phone and often delayed or inadequate via the app
- Fraudsters have exploited Cash App users by posing as support representatives, and the company was slow to address these issues
Limitations Compared to Traditional Banks
- Cash App is not a bank but operates more like a prepaid card service. Only the Cash Card's associated savings account is FDIC insured through a partner bank, not the entire Cash App account or crypto holdings
- Users relying on Cash App for direct deposits or as a primary banking substitute face risks, including account closures and loss of funds without the protections typical of traditional banks
- Many users have reported sudden account closures without clear reasons, often linked to alleged violations of terms of service or suspicious activity, which can be frustrating and financially damaging
In summary, while Cash App offers convenient peer-to-peer payments and banking-like features, it has significant drawbacks including technical outages, inadequate fraud protection, poor customer service, and limited banking safeguards. Users should exercise caution, especially when using it for direct deposits or storing large sums of money
