More than 1,500 consumers complained to the Federal Trade Commission after their Square and Cash App accounts were frozen or deactivated. The agency is investigating whether Block Inc. failed to give those customers adequate help, potentially violating consumer protection laws.
The FTC began its inquiry last year and sent Block a demand for records in January.
For some Square customers, the practical problem was access to money. Accounts frozen or deactivated since 2022 left customers unable to reach funds totalling up to $2.5 million. Customers had completed identity and bank-account verification steps, yet did not receive meaningful assistance from Block, according to the filings.
The case, FTC v Block, 26-mc-80299, is in the U.S. District Court for the Northern District of California in Oakland. Its court filings became public late Wednesday.
Block said it had been working “in good faith” with FTC staff on responses to the agency’s handful of remaining requests. The company also said it remained committed to working constructively with the commission to close the matter.
Block is the parent company of Square and Cash App, and was founded by Jack Dorsey.
The investigation has emerged after a period of retrenchment and strong reported second-quarter results. Block cut more than 40% of its staff in early 2026. It reported gross profit growth of 25% year over year in the second quarter, with an adjusted operating income margin of 27% and gross profit of $3.17 billion.
Cash App’s gross profit grew 31% year over year to $1.97 billion, while Square’s rose 13% to $1.16 billion.
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