Plaid Faces Second Lawsuit for Violating Data Privacy

Possible Visa subsidiary Plaid is facing a new class-action lawsuit in the United States for violation of user data privacy.

The court case was filed by four new plaintiffs at the northern district court of California alleging that Plaid has illegally collected information on over 200 million distinct financial accounts. These are the users of popular payment platforms including Venmo, Coinbase, Square’s Cash App, and Stripe.

Plaid offers technical infrastructure APIs that connect consumers, traditional financial institutions, and developers; and thus links multiple accounts of its users into a single platform. The company started talks to be acquired by Visa earlier this year for $5.3 billion.

Data privacy has become a great concern

The court filing alleged that the Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term obtained “direct and full access” to consumers’ personal banking information through logins and then selling them for its own gain. The lawsuit also highlighted that the acquired data was not essential for Plaid’s services.

The fintech has been accused of showing identical login page of payment platforms prompting the users to login, but these accounts were fully controlled by Plaid.

“Plaid exploits its ill-gotten information in a variety of ways, including marketing the data to its app customers, analyzing the data to derive insights into consumer behavior, and, most recently, selling its collection of data to Visa as part of a multi-billion dollar Acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term,” the lawsuit stated. “Plaid has unfairly benefited from the personal information of millions of Americans and wrongfully intruded upon their private financial affairs.”

Moreover, when users allow permission of data access to the fintech, the company gets access to the entire year of banking details of the customer, the lawsuit alleged.

The fintech was slapped with another similar class-action lawsuit last month for “data plumbing” from popular services like Venmo, Stripe, Cash App, and Robinhood. The company, however, denied all the allegations saying that it never sold any user data.

"This copycat lawsuit is baseless and Plaid will vigorously defend itself. Plaid does not sell or rent consumers' personal information and personal information is only obtained with consent. We firmly believe that consumers should have permission-based access to and control over their financial data, and embody these principles in our practices," a Plaid spokesperson told Finance Magnates.