June 25, a new class action was filed in California against fintech startup Plaid, which was acquired by Visa for $5.3 billion earlier this year. The plaintiffs allege that Plaid violated privacy and data protections by accumulating and monetizing financial transactions of millions of users.

$5,000 per infraction

The complaint alleges that the company accumulated this data by “data plumbing” popular services like Venmo, Stripe, Square’s Cash App and Robinhood. It purports that Plaid knew:

“Every dollar you deposit or withdraw, every dollar you charge or pay to your credit card, and every dollar you put away for retirement, within hours after you make the transaction. Imagine this includes every book or movie ticket or meal you purchase, every bill you pay to a doctor or hospital, and every payment you make (or miss) on your mortgage, student loan or credit card bill.”

The complaint contends that each of the violations has caused damages to the class members that exceed “$5,000 per year individually or in the aggregate”. It does not specify at this point the amount of compensation the class members are seeking.

Plaid denies all allegations

Plaid spokesperson released the following statement to Cointelegraph:

"The lawsuit filed against Plaid is baseless and Plaid will vigorously defend itself. Plaid does not sell and has never sold consumers' personal information or data. Consumer data is obtained and used with consumer consent. We believe strongly that consumers should have permission-based access to and control over their financial data, and embody these principles in our practices."

This article was updated July 1.

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News Reporter