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Plaid has agreed to pay USD 58 million to resolve consumers’ claims that the financial technology company obtained and used bank account credentials and financial information without consent.

The US-based company also agreed in the nationwide settlement to change certain business practices, according to filings Thursday in California federal court made by lawyers for consumers. As representatives from the company say, the claims go back to the earliest days of the company and as such, the underlying claims and challenged conduct do not reflect today’s Plaid.

The consolidated litigation includes five proposed class actions filed in 2020 against Plaid, which has a platform for users to connect their bank accounts to payment apps like Venmo and Square’s Cash App. The plaintiffs alleged in their lawsuit that Plaid has ‘exploited its position as middleman’ to obtain app users’ banking login credentials and use that information to gain access to and sell their transaction histories, without users knowing about Plaid’s role due to alleged deceptive tactics.

A California federal magistrate judge in May 2021 dismissed some of the claims in the case while letting others proceed. The proposed settlement would resolve claims for invasion of privacy, unjust enrichment, and violation of California’s anti-phishing law, among others.

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