Plaid agrees $58m settlement over data privacy class action
Plaid has agreed to pay $58 million to resolve complaints from consumers that it stored and used bank account information without consent.
Plaid says the settlement does not reflect its modern practices
The settlement comes after six months of negotiation and mediation between Plaid and representatives of the claimants.
It concerns the storage and usage of user data by Plaid, which connects to bank accounts to tie them into other third-party services and allow easier services like payment initiation.
The plaintiffs alleged in their lawsuit that Plaid “exploited its position as middleman” to collect banking data and sell transaction histories without their knowledge.
Plaid is accused of scraping details on deposits, withdrawals, transfers, and purchases for users which “did not connect an account to the application”.
If the court approves the settlement, Plaid will also be required to maintain changes to its user interface and delete all stored data for those affected.
The fintech must also reduce the levels of data it stores, restricting it to only “necessary” information for it to offer its services.
Cooley’s Michael Rhodes, lead counsel for Plaid, says the fintech is resolving claims which “go back to the earliest days of the company”.
He adds: “The underlying claims and challenged conduct do not reflect today’s Plaid.”
Approximately 98 million people could be affected by the settlement. If all were to file a claim, each would receive an estimated 60 cents.
