Filing: the FTC is probing Block over inadequate customer service for frozen or deactivated Square accounts amid staffing cuts, following 1,500+ complaints

Your frozen Square or Cash App account may now receive FTC-mandated resolutions, potentially unlocking funds faster.

The Federal Trade Commission (FTC) is investigating Block Inc., the parent company of Square and Cash App, for potential violations of consumer protection laws. Court filings revealed that the FTC is probing whether Block adequately assisted customers whose Square or Cash App accounts were frozen or deactivated. The agency began its investigation last year and has formally requested documents from Block. Consumer complaints suggest that accounts were frozen or deactivated, preventing users from accessing funds totaling up to $2.5 million since 2022, with Block allegedly failing to provide meaningful support. This probe follows Block's significant workforce reduction in early 2026, where it cut over 40% of its staff, citing an embrace of artificial intelligence, which critics questioned as potentially 'AI washing' to mask poor business performance. Block has stated it is cooperating with the FTC.

The FTC's investigation into Block's customer service for frozen accounts highlights a critical tension between cost-cutting measures, such as significant layoffs, and maintaining adequate consumer support. The agency's focus on alleged failures to assist customers, even after verification, suggests a scrutiny of practices that could disproportionately affect vulnerable users or those who rely heavily on these financial platforms. The timing, following Block's large-scale staff reductions and stated embrace of AI, also raises questions about whether operational efficiencies gained through AI have come at the expense of essential human-driven customer care.

This probe could signal increased regulatory oversight of fintech companies regarding account management and dispute resolution, especially as these platforms become more integrated into daily financial lives. For Block, the investigation poses a reputational risk and potential compliance costs, potentially impacting future product development and customer trust. Investors and consumers will be watching for how Block navigates this regulatory challenge and whether it leads to changes in its customer service protocols or its integration of AI in sensitive customer-facing operations.