Venmo Lawsuit 2026, Active Investigations, Closed Settlements & What Users Need To Know About Claims
Venmo users face multiple active legal investigations in February 2026, including frozen account disputes, unsolicited text message violations, and privacy breach claims—but no major settlement offers open claim forms right now. The $58 million Plaid privacy settlement closed in 2022, while Washington residents could receive $500 per illegal referral text if attorneys file a class action lawsuit. Here’s what Venmo users must know about ongoing litigation, past settlements, and how to protect your rights.
What Is The Venmo Lawsuit About?
Attorneys are investigating whether Venmo violated Washington’s Commercial Electronic Mail Act by helping users send promotional referral texts without consent, with potential compensation of $500 per violation. Separate investigations examine Venmo’s practice of freezing accounts and withholding funds for extended periods without explanation, causing financial hardship for users.
In June 2022, Mohammad Al-Ramahi filed a class action alleging Venmo fails to reimburse fraud victims and poses undisclosed security risks. The case remains active in California federal court with no settlement announced.
Plaid Privacy Settlement Already Closed
The $58 million Plaid settlement compensated Venmo users whose bank accounts were accessed between January 2013 and November 2021. The claim deadline passed April 28, 2022, and payments were distributed in 2022-2023. You cannot file new claims for this settlement.
Plaid allegedly created login pages mimicking bank screens to collect transaction history and personal information without proper disclosure.
Washington Referral Text Investigation
Washington residents who received Venmo “Invite Friends” texts could be owed $500 per message under state law, similar to Cash App’s $12.5 million settlement for identical violations. This lawsuit hasn’t been filed yet—it’s still in investigation stage.
If you live in Washington and got referral texts saying “Tap to join Venmo,” attorneys need your information at ClassAction.org.
Similar to the Cash App Class Action Lawsuit Settlement, Washington’s consumer protection laws prohibit companies from facilitating spam texts.
Frozen Accounts & Fraud Claims
The FTC sued Venmo in 2018 for misleading users about fund availability, with consumers reporting funds frozen for 180 days despite providing documentation. Although PayPal agreed to policy changes in May 2018, consumer complaints about frozen accounts and withheld funds continue.
The 2022 fraud lawsuit alleges Venmo transfers are instantaneous and unrecoverable, leaving victims with virtually no recourse for fraud losses. Unlike credit cards or traditional banking, Venmo offers minimal fraud protection.
Users report accounts frozen with $36,000+ balances, closed without explanation or fund return.
Credit Card Cash Advance Fees Investigation
Investigations examine whether banks illegally charge cash advance fees when users send money through Venmo using credit cards, despite these not being traditional cash advances. A 5% fee on a $100 Venmo payment could be unlawful.
For details on this investigation, see our article on Venmo Class Action Lawsuit Users Hit With Hidden Credit Card Cash Advance Fees.
Who Qualifies For Current Investigations?
Washington Text Messages: Residents who received Venmo referral texts from contacts between 2022-2026.
Frozen Accounts: Users whose funds were frozen, withheld, or accounts closed between 2018-2026.
Cash Advance Fees: Anyone charged unexpected fees when using credit cards for Venmo transfers.
Plaid Privacy: Already closed—no new claims accepted.
How To File Claims
No active settlement claim forms exist as of February 2026. Current cases are in investigation or early litigation stages.
What to do:
- Save all Venmo-related documentation (screenshots, emails, statements)
- Report frozen accounts to the FTC at www.FTC.gov/Complaint
- Washington residents: Submit information to ClassAction.org’s investigation page
- Contact consumer rights attorneys for individual arbitration claims
What Compensation Is Available?
Potential amounts depend on which investigation proceeds to settlement:
Washington texts: Up to $500 per illegal message Frozen account claims: Depends on documented losses Fraud victims: Reimbursement for unrecovered transfers Cash advance fees: Fee refunds plus damages
Like the Gmail Lawsuit Claim, privacy violation settlements can take years to resolve.
When Will Payments Be Distributed?
No settlement deadlines exist yet. Active investigations typically take 2-4 years before reaching settlement and distributing payments.
What Documentation Do I Need?
- Text message screenshots showing Venmo referrals
- Account freeze notifications and correspondence
- Credit card statements showing cash advance fees
- Bank statements proving financial losses
- Emails from Venmo about account actions
Last Updated: February 10, 2026
Disclaimer: This article provides general information about Venmo lawsuits and is not legal advice. For specific guidance about your eligibility, consult a qualified attorney.
CTA: Save your documentation now. If investigations become settlements, you’ll need proof to file claims.
Stay informed, stay protected. — AllAboutLawyer.com
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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