Cash app fake accounts are becoming more rampant, as claimed by a new report of Hindenburg Research.
The seller investment firm published its report on Thursday, Mar. 23. It believes that these fake accounts grew on the mobile payment platform because its owner allowed them.
The latest accusation against the Jack Dorsey-founded company, Block (formerly known as Square), triggered an SEC (Securities Exchange Commission) probe.
Cash App Fake Accounts Now Rampant
According to CNBC's latest report, Hindenburg Research accused Block of inflating its customer growth.
The short seller investment company explained that Cash App's owner allowed fake accounts to evade its revenue regulations, allowing them to thrive on the platform.
"Former employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual," stated the NYC-based investment firm in its official report.
Based on the findings Hindenburg Research acquired from its 2-year investigation, the company concluded that Block took advantage of the demographics it claims to be beneficial. But, the investment firm clarified that the inflated growth of Cash App has not been disruptive innovation.
Although this is the case, Hindenburg Research believes that Block's willingness to facilitate fraud against the government and consumers led to the rampant fake Cash App accounts.
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The investment company added that Block mislead its investors through its inflated metrics. Of course, Block rejects Hindenburg Research's accusations.
The Cash App owner said that the report against it is "factually inaccurate." Block reiterated that it is complying with SEC regulations.
As of writing, Block is exploring legal action against Hindenburg Research.
Most Common Cash App Scams
Reader's Digest provided the most common Cash App scams that consumers should look out for.
If the accusations made by Hindenburg Research against Block are true, then these scams could further increase in the future:
- Selling expensive items through the Cash App
- Customer support impersonations
- Cash flipping
- Random payment scam
- #CashAppFriday offer scam
- Investment scams
If you want to learn more details about the Cash App scams mentioned above, just click here.
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For more news updates about fake Cash App accounts and other security threats, always keep your tabs open here at TechTimes.
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