FTC Probes Block Over Frozen Square, Cash App Accounts; $2.5M in Customer Funds at Issue

The Federal Trade Commission is investigating Block Inc. (XYZ) over whether the Square and Cash App parent violated consumer protection laws by failing to help customers with frozen or deactivated accounts, according to Bloomberg. Court filings unsealed late Wednesday revealed the probe, with the agency asking a judge to compel Block to produce documents. The FTC opened the investigation last year and issued a records demand in January. The case is FTC v. Block, 26-mc-80299, U.S. District Court, Northern District of California (Oakland). The FTC's petition cited consumer allegations that frozen or deactivated Square accounts left customers unable to access funds totaling up to $2.5 million since 2022, even after completing identity and bank account verification, Bloomberg reported. Block said it is working in good faith with FTC staff to resolve the remaining requests. The company reported second-quarter gross profit of $3.17 billion, up 25% year over year, with an adjusted operating income margin of 27%.