Plaid, a service used by finance tech apps to connect to consumers' bank accounts, late last year settled a class action lawsuit that alleged the company was collecting "more financial data than was needed." People who have connected their bank accounts to apps such as Venmo, American Express, Betterment, Mint, Robinhood, Acorns, Coinbase and Credit Karma might be entitled to compensation, according to a report by Fast Company last week.
The class action lawsuit also alleged that Plaid "obtained log-in credentials (username and password) through its user interface, known as 'Plaid Link,' which had the look and feel of the user's own bank account login screen," according to the settlement website.
The settlement requires Plaid to pay out $58 million to consumers. But with Plaid's portfolio consisting of over 5,500 client apps and an estimated 98 million people, payouts are likely to be minimal.
A judge approved the proposed settlement in November, and some people have reportedly received notices this month stating they may be eligible to make a claim. A final approval hearing for the settlement is scheduled for May.
"The claims raised in the lawsuit do not reflect our practices," a Plaid spokesperson replied to a request for comment. "We help consumers safely connect their financial accounts to the apps and services they rely on. As Plaid has evolved from backend infrastructure for developers to also providing front-end solutions, we have become an industry leader in consumer privacy practices. We do not, nor have we ever, sold data."
As part of the settlement, Plaid does not acknowledge wrongdoing. And the settlement will not forbid Plaid from continuing to use login information from users.
On Tuesday, Plaid launched the Plaid Privacy Portal, which enables users to see which apps their financial accounts connect to via Plaid and to manage those connections. Users may also use the portal to request that Plaid delete personal data. A Plaid spokesperson said the rollout is unrelated to the privacy lawsuit settlement, but that Plaid did agree to feature the Portal more prominently on its site as part of the settlement agreement.
You may be a class member if you are a US resident who connected a financial account to an app that uses Plaid between Jan. 1, 2013, and Nov. 19, 2021, according to the settlement website. All claims must be submitted by April 28, 2022. Here's the full list of apps that use Plaid.