“If you think about the trajectory of where Plaid was five or six years ago, versus where we are now and where we're headed to the future, this really clears the decks for us to continue moving forward and moving in this API- bank partnership direction and this commitment to really strong, industry leading transparency and control tools for consumers,” said John Pitts, Plaid's head of policy. The use of APIs should eliminate all the complaints raised in the lawsuit, the company said.

Plaid has said that it hopes to have 75% of its traffic committed to bank application programming interfaces by the end of this year. If any other data is collected in the process of screen-scraping the consumer’s account, it will be deleted. For instance, if an app is using Plaid for authentication and needs merely an account routing number, Plaid is committing to only taking that number. Data deletion is eliminating any unneeded data that may have been accidentally collected. In the settlement, Plaid committed to improve data deletion and minimization, improve disclosures, and continue to host a dedicated webpage with detailed information about its security practices.ĭata minimization, in this case, is ensuring that no extra data is pulled than is needed for the fintech app’s purposes. However, in this case they will be given the option of receiving the settlement money automatically through Venmo and PayPal rather than strictly through a check, which could result in more claims.) (In these types of settlements, typically not everyone makes a claim. After the lawyers are paid, if all 98 million people file a claim, they will get about 60 cents each.

The settlement affects an estimated 98 million people for whom Plaid screen-scraped data from a bank account to be fed into a fintech app like Venmo. All alleged that Plaid used consumers’ banking login credentials to harvest and sell detailed financial data without the users’ consent. This settlement encompasses five class-action lawsuits that were combined into one. Under the terms of the agreement, the San Francisco data aggregator has agreed to establish a $58 million settlement fund and make changes to its business practices and policies. Plaid has settled a class-action lawsuit in which consumers alleged that the company used dubious tactics to gather bank account data to share with fintech clients.

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