FTC probes Block over customer service failures for frozen Square accounts

The Federal Trade Commission has launched an investigation into Block Inc., the parent company of Square and Cash App, regarding its handling of customer service for frozen or deactivated accounts. According to a filing reported by Bloomberg, the regulator is examining whether the company violated US consumer protection laws.

The probe centers on allegations that Block failed to provide adequate support to users whose accounts were suspended or deactivated. The investigation was triggered by a significant volume of consumer grievances, with more than 1,500 complaints filed regarding the issue. These complaints highlight a pattern of difficulties users faced when attempting to resolve account status problems or access funds.

Regulatory Context and Staffing Cuts

The timing of the FTC’s inquiry coincides with internal changes at Block. Bloomberg reports that the investigation comes amid staffing cuts at the company. The regulator is assessing whether these operational changes contributed to the inadequate customer service experiences reported by users. The filing indicates that the FTC is focused on determining if Block’s practices violated specific US consumer protection statutes.

This action represents a direct regulatory scrutiny of Block’s operational compliance. The FTC has authority to enforce laws designed to protect consumers from unfair or deceptive practices. In this case, the focus is on the company’s ability to provide reasonable support mechanisms for account issues. The investigation does not yet result in penalties, but it signals heightened regulatory attention on Block’s customer support infrastructure.

Impact on Users and Businesses

The issues primarily affect users of Square and Cash App, two major payment platforms owned by Block. Square serves merchants and small businesses, while Cash App is a peer-to-peer payment service. Users who have had their accounts frozen or deactivated may have faced difficulties in resolving these issues due to insufficient support channels.

The volume of complaints suggests that this is not an isolated incident but a systemic issue affecting a large number of consumers. For merchants relying on Square for daily transactions, account freezes can disrupt business operations. For Cash App users, frozen accounts can limit access to personal funds. The FTC’s investigation aims to determine if Block’s handling of these situations was fair and compliant with consumer protection standards.

What should you do?

Users who have experienced account freezes or deactivations with Square or Cash App should document all interactions with customer support. Keeping records of tickets, emails, and call logs can be useful if further regulatory action occurs. Consumers should also monitor official communications from Block for updates on account status. It is advisable to review the terms of service for clarity on account suspension policies.

What to do and how to stay safe: Block

• Document all customer support interactions regarding account freezes or deactivations, including dates, times, and reference numbers.
• Review the platform’s terms of service to understand the specific reasons for account suspension and the outlined resolution process.
• Monitor official channels from the platform provider for updates on account status or policy changes.
• Report unresolved issues to consumer protection agencies if standard support channels fail to provide a resolution.

General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.

Frequently asked questions

Why is the FTC investigating Block?

The FTC is investigating Block for potential violations of US consumer protection laws related to inadequate customer service for frozen or deactivated Square accounts.

How many complaints triggered the probe?

The investigation follows more than 1,500 complaints from users regarding the issue.

Are there staffing issues at Block?

Yes, the Bloomberg report states that the investigation comes amid staffing cuts at the company.