Plaid must pay $58 million to users of Venmo, Credit Karma and other apps (2024)

FAQs

Why is venmo forcing Plaid? ›

Plaid provides a link so financial institutions can securely share user data with apps and payment services like Venmo. You don't have to create your own account with Plaid, but you can use Plaid Portal to view what types of information you have shared with the service.

Venmo uses Plaid to verify your bank account information and, periodically, your bank account balance to check if you have enough funds to cover certain transactions.

The lawsuit was brought on behalf of the individuals who allegedly believed based on the design of Plaid Link that they were providing login credentials directly to their banks, and/or whose accounts at financial institutions Plaid accessed using the user's login credentials and connected to a web-based or mobile ...

The lawsuit alleges that Plaid violates consumer privacy and computer data protection laws by collecting consumers' sensitive bank login information through software embedded in a host of fintech apps such as Venmo, Coinbase, Square's Cash App, and Stripe.

Yes, in general using Plaid for banking is safe. Plaid follows strict security protocols to ensure sensitive data stays out of the hands of fraudsters. On top of that, for consumers, Plaid allows you to view and control exactly what data they've shared.

If you can't use Plaid for any reason, you can still link an account to Venmo manually. Here's how: Select Manual Verification instead of Instant Verification when prompted. Enter your account and routing number, following the onscreen prompts.

Plaid authenticates your financial information, permitting companies to transfer sensitive information securely. But is Plaid safe? Yes, it's considered safe to use.

Controversies. The company has faced controversy for scraping user data, impersonating bank login screens, and not properly disclosing the privacy risks associated with the service.

Plaid is free for consumers using a Plaid-powered app.

The order puts an end to five class action claims representing around 98m Plaid users who accused the fintech of using their banking login credentials to harvest and sell detailed financial data without their consent.

Does Credit Karma use Plaid? ›

As it turns out, the Plaid class action settlement is real, and there's a good chance that it affects you. Thousands of popular apps use Plaid to connect to your bank account. Some you might have on your phone include Acorns, Coinbase, Credit Karma, SoFi, and Venmo.

– Consumers today filed a class-action lawsuit against leading e-commerce payment supplier and owner of Venmo, PayPal, alleging it enacts illegally anticompetitive policies through its anti-steering rules that ultimately lead to millions of consumers paying excess charges annually, according to attorneys at Hagens ...

Venmo needs to re-verify your bank account.

Venmo may also lose the connection with your bank if it's been a long time since you've originally verified your account, or if you've been processing more or higher-value transactions than usual.

If you see this error message, there may be some steps you need to take before you can connect your financial account via Plaid successfully. Some financial institutions require you to take specific steps to enable your accounts to be linked to third-parties like Plaid.