Plaid is facing a lawsuit which alleges that it has violated users’ privacy and used customers’ private data in inappropriate manners for years, affecting over 200 million individual accounts, according to a court filing with the northern district of California.
The California-based financial services company, founded in 2012, works to build products to power digital finance and FinTech issues through its own data transfer network.
The lawsuit alleges that Plaid has made a practice of taking that information for itself through log-ins to customer accounts, and then selling the information or “otherwise highly misusing” it without disclosing anything to customers.
Plaid, according to the court document, describes itself as an infrastructure company, according to co-founder Zach Perret. This does not capture the full picture of what the company’s “true purpose” is according to the document: “invading consumers’ privacy for profit,” the document reads.
After gaining access to the data, Plaid has reportedly been able to harvest large swathes of personal data, including banking and other financial accounts, through allegedly falsely making users believe that personal data is being used for communication directly with their banks.
Users are shown data login screens that look identical to their banks’ — but which, unbeknownst to them, are wholly controlled by Plaid, the court report alleges.
If the users select an option on their phones to allow Plaid to access their account information, Plaid is reportedly able to access years of a customer’s bank account transactions for purposes unrelated to the transactions they wanted to conduct.
In addition, Microsoft has teamed with Plaid for a financial management solution, Money in Excel, which allows users a secure integration of their financial account, imported data and sharper insights into financial health overall.
Selected by Fintech Tube