Data Sharing Lawsuit Against Plaid Could Shake Up the Market

Two California men have sued data aggregator Plaid alleging the company violated their data privacy; while the suit has yet to make it to court it could have far reaching implications if the misconduct is proved to be true; “The lawsuit filed against Plaid is baseless and Plaid will vigorously defend itself,” a spokesperson said to American Banker. “Plaid does not sell and has never sold consumers’ personal information or data. Consumer data is obtained and used with consumer consent. Plaid believes strongly that consumers should have permission-based access to and control over their financial data, and embodies these principles in its practices.”; with open banking and data sharing becoming the norm this suit could force regulators in the U.S. to set up similar standards to those seen in the UK and Europe; the lawsuit does bring to light some practices that are seen as controversial, screen scraping and the process of acquiring bank logins; the allegation of selling data is the most damning and Plaid has been adamant that they do not engage in the practice of selling data; “The allegation that Plaid collects vast amounts of data and then monetizes it is categorically untrue,” Alexander H. Southwell, Partner at Gibson Dunn, said to American Banker. American Banker.