As reported by Law360 (subscription), Lieff Cabraser has filed a class action lawsuit in federal court in California alleging that financial tech start up Plaid Inc. stole Venmo and Stripe users’ personal banking data and sold that data to third party apps without the users’ consent in violation of federal and state privacy laws. Plaid, which recently agreed to be acquired by global payments behemoth Visa for $5.3 billion, provides third-party bank account authentication services for several well-known payment and investment apps, including Venmo, Coinbase, Square’s Cash App, and Stripe.
The complaint alleges that Plaid takes consumers’ financial account login credentials, accesses their banking and other financial accounts several times per day, and then sells and otherwise misuses the highly personal and private information it wrongfully obtains. The complaint notes that Plaid discloses none of this to consumers, and that these invasions represent an egregious violation of established privacy norms.
The lawsuit further alleges that consumers are tricked into giving their bank login information to Plaid because Plaid works to hide its involvement as a third-party in users’ bank verification in the various apps. The complaint explains that Plaid’s in-app authentication procedure and display screens are designed to look and feel like the various bank login screens, intending to lead consumers to believe they are providing login info directly and privately to their own banks.
The lawsuit presents claims for violations of state and federal consumer protection and fraud laws and seeks actual and punitive damages as well as injunctive relief to purge all improperly obtained data and change its practices and advisories going forward.
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