All About Square Lawsuits

Learn what Square lawsuits are out there, and how to take action…

Square is a highly prominent payment processing company, which has made it easy for small business owners and entrepreneurs to process payments with their phones, on the go. Still, in spite of how easy the service is, many customers have problems when they try to contact Square customer service. Square customers complain about issues like refunds, hidden fees, end customer service failures. Issues are usually routed to an online article  database. So some people learn how to contact Square corporate offices in hopes that that will get a resolution. But it doesn’t always work.

So what can you do? You can file a complaint against Square, but what about lawsuits?



Are lawsuits allowed against Square?

Firstly, when you look over your user agreement with Square it probably contains information that says you can’t sue them except in small claims court. So, joining big giant lawsuits isn’t available to you because of an arbitration clause. Small claims court can be tricky and it can be time-consuming which is why consumer arbitration is a great alternative.


What is a Class Action Lawsuit? Can I file a Class Action Lawsuit against Square?

Class action lawsuits are single lawsuits that represent hundreds if not thousands of people who all have the same issue against the same company. However, you probably can’t join a class action lawsuit or file a class action lawsuit because of the fine print in your user agreement as a customer. That doesn’t mean they don’t exist. Government organizations and regulating authorities as well as former employees are not bound by the same user agreement so they can bring a class action lawsuit against Square.


As a Square customer, what are my options for a lawsuit?

Your first option is to use small claims court. This process lets you go before a local judge and present your case. You have to file all the paperwork, go to court hearings, and pay court fees. Alternatively you can use consumer arbitration where you argue your case before an independent arbitrator, something you can do from the comfort of your home. The independent arbitrator has the power to force Square to fix the issue and give you compensation. 


Recent and notable Square lawsuits:

Square payment fees lawsuit

Square was the subject of a lawsuit filed in April 2021 alleging that the high fees imposed on merchants were unreasonable. The merchants alleged that these credit card processing fees violated antitrust and unfair competition laws. Four merchants filed a class-action lawsuit together seeking a court directive forcing the company to change their credit card surcharges and offer compensation.

Square lawsuit over unsolicited text and TCPA violations

Square faced a class action lawsuit in 2020 over TCPA violations and unsolicited texts. In this lawsuit the plaintiffs allege that they receive text messages from the company without giving their consent. They entered their phone numbers when making payments using a Square POS system in order to earn loyalty rewards from the business, not from Square. After that, he received automated text messages from Square, even though he never provided consent to receive notifications. He claims that these text messages were a violation of his privacy, intruded on his personal life and were considered a nuisance especially when they came from automated telephone dialing systems.

Square lawsuit from shareholders

Remember how former employees, government agencies, and other groups are more likely to file lawsuits against companies like Square? That’s what happened with an October 2021 lawsuit filed by shareholders. Shareholders filed a lawsuit after the acquisition of AfterPay Limited. The lawsuit alleges that the company did not propose a vote regarding this acquisition to the shareholders in direct violation of the law. 

Square lawsuit over misuse of medical records

In this Square lawsuit, the company faced a class action lawsuit saying that the software provider failed to protect medical cata from its customers, violating HIPAA laws. Health care providers use the service for payment processing and some of them send payment confirmation via text message and invoices via text message, often sending to the wrong number and in so doing sharing medical information with other people.

Square lawsuit over merchant payment holds

This lawsuit, filed in California states that the company was fraudulent, negligent, and utilized unfair and deceptive actions with the merchant payment holds. It was alleged that Square tried to hold 30% of all plaintiff transactions without plaintiff’s authorization, something made worse by the fact that it was done during the covid-19 crisis. The company unilaterally instituted a 120-day hold on 30% of all transactions with very little warning and vague legal explanations as to why. There are also no terms included in the payment processing terms that address this issue giving Square no legal grounds for their actions.

Square lawsuit over delivery tips

In 2018 Square agreed to pay 2.2 million dollars for a class action lawsuit alleging that the delivery service owned by Square, Caviar, collected tips on behalf of drivers but did not give them out. The plaintiff said he was required to pay an 18% gratuity on all of the purchases he made using this delivery service but that 18% gratuity for delivery drivers was never actually given to the drivers. It was presented to customers as a driver tip, not a service fee.

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