Plaid, a diversified FinTech infrastructure provider, has agreed to pay USD 58 million in a class-action lawsuit over claims the company used banking login credentials to share data to third-party firms without prior consent.

The settlement encompasses five separate lawsuits combined as one, and around 98 million people are affected by it. Claimants can also receive the settlement money through payment platforms such as Venmo and Paypal in addition to automated clearing houses (ACH) and physical check payments.

Plaid claims it did not sell users’ financial data, and that the settlement was to avoid the cost and burden of litigation. 

As a result of the settlement, the company agreed to provide details of the information it collects from users’ financial accounts, including what it collects, why it collects it, and who it will be shared with. Plaid also agreed to provide an explanation of its data retention and deletion policies and to only keep the data that is needed or users specifically request. 

Plaid offers white-label and full-stack FinTech infrastructure for financial institutions, wealth managers, and other enterprises to embed banking, payment, financial advice, and lending solutions to their FinTechs. It also enables users to connect their financial accounts to over 4,500 third-party apps including Venmo, SoFi, Stripe, and M1 finance, among others. As of April 2021, its infrastructure connected enterprises to over 11,000 financial institutions (FIs) across the US, Canada, the UK, and Europe.