Class Action Lawsuit Alleges Visa Subsidiary Violated Privacy And Data Protections Of Venmo, Stripe, Square’s Cash App, Robinhood & More
A new class action alleges that Plaid, which Visa recently bought for over $5 billion, had unparalleled access to the financial information of millions of users. Class Action Lawsuit Alleges Visa Subsidiary Violated Privacy And Data Protections Of Venmo, Stripe, Square’s Cash App, Robinhood & More
June 25, a new class action was filed in California against fintech startup Plaid, which was acquired by Visa for $5.3 billion earlier this year. The plaintiffs allege that Plaid violated privacy and data protections by accumulating and monetizing financial transactions of millions of users.
The complaint alleges that the company accumulated this data by “data plumbing” popular services like Venmo, Stripe, Square’s Cash App and Robinhood. It purports that Plaid knew:
“Every dollar you deposit or withdraw, every dollar you charge or pay to your credit card, and every dollar you put away for retirement, within hours after you make the transaction. Imagine this includes every book or movie ticket or meal you purchase, every bill you pay to a doctor or hospital, and every payment you make (or miss) on your mortgage, student loan or credit card bill.”
Updated: 7-2-2020
Coinbase’s “Data Plumber” Denies All Allegations
Coinbase’s “data plumber” denies storing users’ login credentials in plain text, and all the other allegations in a new class action complaint.
A source close to Plaid, the company that serves as a “data plumber” to Coinbase, Robin Hood, Square’s Cash App and many others, denied all allegations of the class action complaint that was recently filed.
The entire complaint hinges on the allegation that Plaid sells user data to the “highest bidder”. A Plaid spokesperson called this allegation “baseless”.
A Money-Making Operation?
A source close to Plaid’s legal team, speaking to Cointelegrpah on the condition of anonymity, reaffirmed that the company has never sold user data in any shape or form. They also opined that this is just a “money-making operation” for the lawyers:
“They see companies in a particular position, like getting acquired or having an investment. And that’s a big money-making operation for them.”
This statement refers to the fact that Plaid is in the process of being acquired by Visa — a deal which has not yet been finalized. This puts Plaid in a vulnerable position.
Visa did not respond to Cointelegraph’s request for comment.
PNC Bank Blocked Plaid In 2019
The complaint alleged that Plaid collects data going back five years and going forward “in perpetuity”. They also allegedly collect health-related data without storing it in compliance with the Health Insurance Portability and Accountability Act, or HIPAA.
Our source assured Cointelegraph that Plaid only stores the amount of data necessary for the services it provides. They also said that the company does not intentionally collect users’ health data.
The source also denied the allegation that Plaid stores users’ login credentials in “plain text”, making it vulnerable to hackers. On the contrary, the company takes “security very seriously”, the source said.
The complaint mentioned a case from 2019, when PNC Bank blocked Plaid. They state that the reason was that “aggregators access account numbers, many store them indefinitely, often unbeknownst to customers”. Our source declined to comment on this case.
Coinbase Relies On Plaid
Coinbase’s website confirms that the company relies on Plaid for account verification and the data is never shared with the exchange, but stays with its “data plumber”:
“For US customers, you can verify your account in just a few minutes by entering your bank credentials. You may be familiar with this process if you’ve ever verified a bank account on Paypal or similar services.
These banking credentials are never sent to Coinbase, but are shared with an integrated, trusted third-party, Plaid Technologies, Inc., to facilitate instant account verification. This service may store the provided credentials for verification purposes or use them on a per-transaction basis for fraud prevention, and to help verify a sufficient balance is available to process your transaction.”
Coinbase has not replied to our request for comment in time for publication.
As we have learned from numerous legal cases, a resolution may take some time. On the other hand, Plaid’s unfinalized acquisition places it in a vulnerable position. That may lead this case to a settlement sooner than would be otherwise expected.
The plaintiff’s legal team did not respond to Cointelgraph’s inquiry.
Class Action Lawsuit Alleges,Class Action Lawsuit Alleges,Class Action Lawsuit Alleges,Class Action Lawsuit Alleges,
Related Articles:
Private Equity’s Trillion-Dollar Piggy Bank Holds Little For Struggling Companies (#GotBitcoin?)
TikTok Teens Overload Trump’s Online Store With Orders Only To Abandon Shopping Cart
Fed Stress Test Finds U.S. Banks Not Healthy Enough To Withstand “Few Quarters” Economic Downturn
Elizabeth Warren Was Right About Whacky Stockmarket Fundamentals (#GotBitcoin?)
Two Of The Latest High-Profile Trump Resignations
US Banks Have Seen A Record $2 Trillion Surge Of Deposits Since The Coronavirus Crisis Began
Trump Gets KPOP’d And Tic Toc’d As Teens Mobilized To Derail Trump’s Tulsa Rally
The Dangerous Secrets Our Working-From-Home Photos Reveal
New Decentralized Cybersecurity Solution Enables Passwordless Logins (#GotBitcoin?)
CIA’s ‘Lax’ Security Led To Massive Theft of Hacking Tools, Internal Report Finds
Signal Is A Truly Private Chat App Ideal For Protestors (#GotBitcoin?)
Maintain Your Privacy And Security During A Protest (#GotBitcoin?)
Borrower, Beware: Credit-Card Fraud Attempts Rise During The Coronavirus Crisis
Report Says Chinese And Iranian Hackers Seek To Steal Coronavirus Research
28,000 GoDaddy Hosting Accounts Compromised
Some States Dabble In Online Voting, Weighing Pandemic Against Cybersecurity Concerns
Antonopoulos: Chainalysis Is Helping World’s Worst Dictators & Regimes (#GotBitcoin?)
Survey Shows Many BTC Holders Use Hardware Wallet, Have Backup Keys (#GotBitcoin?)
Blockfolio Quietly Patches Years-Old Security Hole That Exposed Source Code (#GotBitcoin?)
Apple iPhone May Be Vulnerable To Email (Mail) Hack
Gates Foundation, WHO And Wuhan Institute of Virology All Hacked!
Google Hack Requires That You Updated Chrome Browser Now To Version: 81.0.4044.113
Privacy-Oriented Browsers Gain Traction (#GotBitcoin?)
Can Blockchain Technology Counter US Anti-Message Encryption Bill? (#GotBitcoin?)
Chinese Military Turns To U.S. University To Conduct Covert Research
CIA Has Had Keys To Global Communication Encryption Since WWII
Hostile Spies Target U.S. With Cyber, Encryption, Big Data, Report Finds
Hackers Stole And Encrypted Data of 5 U.S. Law Firms, Demand 2 Crypto Ransoms
Ex-CIA Engineer Goes On Trial For Massive Leak
Multi One Password (Portable App)
After He Fell For A $40K Phone Scam, His Bank Offered To Help—If He Stayed Quiet (#GotBitcoin?)
Your PGP Key? Make Sure It’s Up To Date
Bezos’ Phone Allegedly Hacked By Account Associated With Crown Prince
Major Companies Shared Vulnerability Used In Travelex Cyberattack (#GotBitcoin?)
Microsoft Releases Patch To Patch Windows Flaw Detected By NSA
VPN Tier List 2020 (Comparison Table)
SEC Market-Surveillance Project Hits Snag Over Hacker Fears
Inside China’s Major US Corporate Hack
Twitter Bug Exposed Millions of User Phone Numbers
U.S. Cyber Officials Give Holiday Shopping Advice For Consumers
Is Cayla The Toy Doll A Domestic Spy?
Google’s “Project Nightingale” Faces Government Inquiry Over Patient Privacy.
Which Password Managers Have Been Hacked?
DNS Over HTTPS Increases User Privacy And Security By Preventing Eavesdropping And Manipulation
Russia Steps Up Efforts To Shield Its Hackers From Extradition To U.S.
Barr Revives Debate Over ‘Warrant-Proof’ Encryption (#GotBitcoin?)
Should Consumers Be Able To Sell Their Own Personal Data?
Doordash Says Security Breach Affected Millions Of People (#GotBitcoin?)
Fraudsters Used AI To Mimic CEO’s Voice In Unusual Cybercrime Case (#GotBitcoin?)
Pearson Hack Exposed Details on Thousands of U.S. Students (#GotBitcoin?)
Cyber Hack Got Access To Over 700,000 IRS Accounts (#GotBitcoin?)
Take A Road Trip With Hotel Hackers (#GotBitcoin?)
Hackers Target Loyalty Rewards Programs (#GotBitcoin?)
Taxpayer Money Finances IRS “Star Trek” Parody (#GotBitcoin?)
IRS Fails To Prevent $1.6 Billion In Tax Identity Theft (#GotBitcoin?)
IRS Workers Who Failed To Pay Taxes Got Bonuses (#GotBitcoin?)
Trump DOJ Declines To Charge Lois Lerner In IRS Scandal (#GotBitcoin?)
DMV Hacked! Your Personal Records Are Now Being Transmitted To Croatia (#GotBitcoin?)
Poor Cyber Practices Plague The Pentagon (#GotBitcoin?)
Tensions Flare As Hackers Root Out Flaws In Voting Machines (#GotBitcoin?)
Overseas Traders Face Charges For Hacking SEC’s Public Filings Site (#GotBitcoin?)
Group Hacks FBI Websites, Posts Personal Info On Agents. Trump Can’t Protect You! (#GotBitcoin?)
SEC Hack Proves Bitcoin Has Better Data Security (#GotBitcoin?)
Leave a Reply
You must be logged in to post a comment.