Litigation ordered to move forward against financial services startup company Plaid, accused of acquiring customer banking credentials without permission

On Friday April 30th, 2021, U.S. Magistrate Judge Donna Ryu determined that a consolidated class of customers had adequately alleged that Plaid violated their privacy under California law by hiding its role as a transactional middleman in order to secretly download their financial data. The lead plaintiff, represented by Lieff Cabraser, says he had no idea he was sharing his banking credentials with Plaid when he signed up for a Venmo account in 2019. The lawsuit advances claims that Plaid hid the fact that it was accessing his sensitive financial information by prompting him to login to his bank to set up a Venmo account, a misleading process that allegedly omits that fact that Plaid is actually intercepting a trove of consumer spending data that it later resells.

“We’re very pleased by the ruling and the recognition that we’ve adequately alleged an invasion of privacy that was achieved via deceit,” Rachel Geman, a partner at Lieff Cabraser who represents the class, said Friday. “We’re excited to move forward.”

You  can read a copy of Judge Ryu’s order, or click here to learn more about the lawsuit.

About Rachel Geman

A partner in Lieff Cabraser’s New York office, Rachel Geman’s practice is dedicated to employment law, consumer protection, and recovering money for the government lost to fraud through False Claims Act litigation. On behalf of her clients, Ms. Geman has filed qui tam suits in multiple courts involving numerous industries that are under investigation, and is presently involved in active litigation involving off-label and kickback claims in the pharmaceutical industry. Her current class action cases involve employment discrimination, consumer civil rights, and consumer protection.

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