RIABiz: “Fraud lawsuit slams Plaid”

Oisin Breen of RIABiz has this coverage of Herrera Purdy’s class action privacy suit against Plaid Inc.:

‘Fraud’ lawsuit slams Plaid on eve of historic $5.3-billion payday; some experts say it’s a ‘fishing expedition,’ but plaintiff’s lawyers say, ‘This is no shakedown’

As Plaid nears the date when it banks a $5.3 billion dollar check from Visa, it may face a final hurdle from a class action alleging its value proposition depends on a “massive invasion” of the privacy of over 200 million bank and brokerage accounts.

Filed on May 5, the suit alleges that San Francisco-based Plaid spoofs bank and investment firm logins to finagle a vast “trove” of “wrongfully obtained” data that it resells as “consumer behavioral insights.” Plaid is also alleged to have failed to disclose its process.

[. . .]

“If Plaid is actually downloading and saving financial data without permission, and in breach of consumers’ rights, then it would need to reengineer the product and go on an apology tour … and regulators may be punitive.”

[. . .]

“[By] making me think that I’m going to my bank’s website when I’m not, you’re misrepresenting at least by omission.  Even if it’s anonymized … if they’re storing my data … they’re going beyond the scope of what they were given permission to do … [and] profiting through deception.”

Read the rest of the article here.