Plaid Agrees to Settle Privacy Class Action for $58 Million
As reported by Sara Merken of Reuters, financial technology company Plaid Inc. has agreed to pay $58 million to resolve consumers’ claims that the company obtained and used bank account credentials and financial information without consent. In the settlement, Plaid also agreed to change certain business practices. According to the parties’ settlement filings, “Plaid has agreed to implement meaningful business practice changes designed to remediate alleged privacy violations, improve user control over their private login information and financial data, and safeguard their privacy going forward."
Shawn Kennedy of Herrera Kennedy LLP, counsel for the plaintiffs in the case, said in a statement, “Plaintiffs look forward to presenting the settlement—and its benefits for consumers—to the court."
The article further notes:
The consolidated litigation includes five proposed class actions filed last year against Plaid, which has a platform for users to connect their bank accounts to payment apps like Venmo and Square's Cash App. The plaintiffs alleged in their lawsuit that Plaid has "exploited its position as middleman" to obtain app users' banking login credentials and use that information to gain access to and sell their transaction histories, without users knowing about Plaid's role due to alleged deceptive tactics.
For prior coverage of Herrera Kennedy and the Plaid class action, see the following links:
Lawsuit against Plaid heightens focus on data privacy issues