Cash App, the peer-to-peer payment app used by millions across New York and beyond, was so lax with its onboarding controls, according to research cited in class-action court filings, a user could successfully clear the hurdle of identity verification by submitting a photo of a Barbie doll.
Fake accounts opened under names including Jesus Christ, Elon Musk and Donald Trump successfully conducted transactions “without triggering any verification safeguards or identity validation checks,” according to the court papers.
California-based parent company Block Inc. employed so few safeguards it “actively enabled” fraudsters to scam customers, many of them unbanked or underbanked, said New York Attorney General Letitia James, whose office, joined by a coalition of states’ attorneys general, conducted its own investigation of Cash App for alleged violations of business and consumer protection…
MANAGEMENT & CULTURE (THE “TONE AT THE TOP”)
Fraud thrives in “sloppy” environments where leadership ignores the rules.
- The Fraud Triangle: For fraud to occur, three elements must be present: Pressure (the need for money), Rationalization (thinking “I deserve this”), and Opportunity (weak controls). You can only control the Opportunity.
- Whistleblower Hotline: Provide an anonymous way for staff to report “odd behavior.” Most internal frauds are caught via tips, not audits.
- Background Checks: Conduct credit and criminal record checks for all employees in financial or data-sensitive roles.
- Annual Ethics Training: Make sure every staff member knows that the company has a Zero Tolerance policy toward “borrowing” from petty cash or fudging overtime.