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Information about the class action lawsuit against Plaid and the proposed settlement is shared here in the spirit of transparency, one of Give Lively’s core values.
As you may be aware, Plaid Inc. has agreed to a $58 million settlement fund to be used for cash payments in a class action litigation against it. The settlement fund is not a court decision for or against Plaid, nor an acknowledgement of wrongdoing by Plaid, which denies the allegations, asserting that it adequately disclosed and maintained transparency about its practices to consumers.
Plaid enables connections between a user’s financial account and approximately 5,000 mobile and web-based apps, like Venmo, Robinhood and American Express. In particular, Plaid makes it easy to donate to charities via ACH (direct debit from a bank account).
The class action complaint alleges that Plaid improperly obtained more financial data than was needed when users authorized Plaid to access their bank accounts. It also alleges that Plaid misled users by asking for login credentials through a user interface that had the look and feel of the user’s bank account login screen, whereas the username and password were actually being provided to Plaid. The time period at issue is January 1, 2013, to November 19, 2021. A hearing took place on May 12, 2022, after which a federal court judge approved the banking app’s privacy class action settlement.
During the time period in question, Give Lively used Plaid to provide donors with the ability to donate via ACH (direct debit from a bank account), the most cost-effective payment method. Stripe, the payment processor that integrates with Plaid to complete these transactions, charges 0.8% (with a cap of $5, no matter how large the donation), versus paying by card, which can range from 2.2% to 3.5% depending on the card.
As part of its settlement, Plaid has agreed to:
For more detail, see what non-monetary benefits the settlement provides.
Give Lively is committed to offering low-cost payment options to donors that ensure that more of each donation goes to the nonprofit and toward a social good. Given the remedial actions taken by Plaid, Give Lively — like Venmo/PayPal, American Express and Robinhood — will continue to use Plaid to authorize these transactions.
The deadlines for objections and requests for exclusion have passed (as of March 4, 2022, and April 28, 2022, respectively).
As of September 2022, Plaid shared the outcome on the court-approved legal notice about the Class Action Settlement:
“On July 25, 2022, the Court entered a Judgment for Final Approval of the Settlement. No appeals were filed. The "Effective Date" of the Settlement was August 25, 2022. The deadline to submit claims was April 28, 2022. Claim forms are being reviewed and payments for timely valid claims are expected to be issued on or before October 24, 2022. If the Administrator needs more information regarding a claim you submitted, you will be contacted via the email address you provided on your claim form.”