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If you use financial apps such as Venmo, Robinhood, or other certain online banking services, you may be eligible for a payout after Plaid, a financial technology company, settled a class action lawsuit.
The lawsuit alleged Plaid took improper actions when securing the connection between users’ bank accounts and the online app or service. A $58 million settlement was reached.
Plaid allows consumers to link their bank accounts to financial services apps. The company is an important but unknown middle man between the banks, who hold consumers’ cash, and the dozens of platforms who vie to be the platform of choice to send that cash. Bankers refer to companies like Plaid as "the plumbing" behind how these apps work.
This "plumbing" has become more important as more Americans use mobile wallets to send money to friends, families and businesses.
Visa, when it bought the financial technology company in January 2020, estimated that 1 in every 4 Americans who have a bank account have used the underlying technologies of Plaid.
The lawsuit alleged that Plaid obtained more financial data than was needed when securing these transactions and that Plaid also obtained login credentials through its interface, known as "Plaid Link," which had the look and feel of the user's own bank account login screen, when users were actually providing their login credentials directly to Plaid.
Plaid denies the allegations.
In this photo illustration the Venmo - Share Payments logo seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
As part of the settlement, Plaid must pay out consumers’ valid claims for compensation, as well as enact several privacy and policy changes.
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Who is part of Plaid’s class action lawsuit settlement?
All United States residents who own or owned one or more financial accounts that Plaid accessed between Jan. 1, 2013 - Nov. 19, 2021 are part of the settlement. Those whose login credentials were obtained are also eligible to file a claim.
Some may have already received a settlement notice by mail or email. If you did not receive a notice, you may still be a class member.
You can check whether apps or services that you connected to your financial account used Plaid for the connection by clicking here.
How to file a claim in Plaid settlement
To claim a cash payment as part of Plaid’s $58 million settlement, you need to fill out a claim form. You can do so online or by mail.
Online: Fill out and submit the form at www.PlaidSettlement.com.
By Mail: After printing out a copy of the claim form, mail to:
- Plaid, Inc. Privacy Litigationc/o Settlement Administrator1650 Arch StreetSuite 2210Philadelphia, PA 19103
The deadline to file a claim is April 28, 2022. Payout amount depends on the number of valid claims filed.
For more information, call 855-645-1115.
Apps that use Plaid
Approximately 5,000 mobile and web-based apps use Plaid to enable users to connect the app to users' bank accounts.
You can check whether apps or services that you connected to your financial account used Plaid for the connection by clicking here.
This story was reported from Detroit. The Associated Press contributed.