A new complaint against fintech startup Plaid has been filed with more plaintiffs alleging that the firm violated the data privacy of its users.
The new complaint filed on behalf of 4 new plaintiffs alleged that Plaid – that was purchased by Visa for $5.3 Bln this year – collected information on over 200 Mln distinct financial accounts who use services like Venmo, Coinbase, Square’s Cash App along with Stripe.
The complaint states Plaid obtained “direct and full access to consumers’ personal financial banking information for Plaid’s own commercial purposes wholly unrelated to the consumers’ use of the apps.” It added:
“Plaid exploits its ill-gotten information within several of ways, including marketing the data to its application users, analyzing the info to derive insights into consumer behaviour, and, lastly, selling its collection of data to Visa as a part of a multi-billion dollar acquisition. Plaid has unfairly benefited from the private information of several million Americans and wrongfully intruded upon their private financial affairs.”
This is the 2nd legal complaint filed against Plaid. The primary complaint, was filed earlier on 25th June, alleged Plaid was “data plumbing” popular services like Venmo, Stripe, Cash App as well as Robinhood.
However, Plaid has denied the accusations and said that it never sold its user data. Coinbase also confirmed it does depend on Plaid for account verification but data has never been shared with the exchange.