Plaid Inc. Class Action Settlement Over Private Data Violations
Plaid, a financial services firm accused of improperly accessing clients’ data on Venmo and Coinbase, has agreed to pay a class action settlement of $58 million.
In re: Plaid Inc. Privacy Litigation
Plaid Inc. agreed to establish a $58 million cash fund to reimburse a nationwide class whose bank accounts have been accessed without their knowledge from January 2013 in a proposed settlement filed late last Thursday in federal court in California.
Plaid Inc. Alleged Modus Operandi
Plaid Inc. is a financial software company that assists app users in connecting their bank accounts to their apps.
Plaintiffs accused Plaid of creating a login page that replicated the look and feel of the login screens for their own bank accounts in a class action lawsuit filed in May 2020.
The plaintiffs argue that consumers would then submit their login credentials, believing it was for their accounts. Plaid then allegedly exploited the login information to obtain private transaction histories, investment histories, income information, and other personal information.
Tentative Settlement Information
The proposed $58 million settlement would resolve charges that Plaid violated users’ privacy rights by concealing how it obtained bank login information when consumers utilized Plaid-partnered apps such as Coinbase and Venmo.
Attorneys are asking for up to $14.5 million in fees as part of the settlement, while consumers filing claims will receive a predetermined payment amount. Additionally, the settlement requires Plaid to improve its privacy policies and user interaction.
Plaid stated in a statement on Friday that it was already implementing the settlement’s privacy requirements and that the company has improved since 2013.
After attorneys’ expenses and claim payouts are made, any remaining amount will be donated to the nonprofit Privacy Rights Clearinghouse as well as Consumer Reports.
Meanwhile, the Consumer Financial Protection Bureau is apparently investigating the payback app Venmo for its collection tactics, particularly how it approaches consumers who owe payments.
In February, the consumer watchdog agency served a Civil Investigative Demand on Venmo’s parent company PayPal, seeking information relating to Venmo’s illicit financial transfers and collection methods, as well as other related matters.
Editor’s Note on Plaid Settlement For $58 Million Over Users’ Privacy Class Action Lawsuit:
This article is written to inform you of the latest class action settlement of Plaid Inc. over users’ sensitive data being illegally exposed. Another similar company, Interactive Brokers, has been charged with a class action over allegedly allowing a scammer (Haena Park) to use their services.
Case Name & No.: In re: Plaid Inc. Privacy Litigation, Case No. 4:20-cv-03056
Jurisdiction: United States Court Northern District of California San Francisco Division
Products/Services: Users’ bank data
Allegations: Plaid Inc. allegedly stole users’ bank data via its login system on its website
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