In a lawsuit filed Wednesday, Toronto-Dominion Bank, the Canadian parent company of TD Bank and a minority owner of TD Ameritrade, claims Plaid violated trademark agreements and used TD Bank's logos to secure client login data, as well as other information.
"After repeated attempts to work through these issues with Plaid, TD is taking legal action to protect our customers and our brand," said Greg Braca, president and CEO of TD Bank, in a statement that was released shortly after the suit was filed in the U.S. District Court for the District of New Jersey in Camden.
Plaid, which was recently acquired by the financial services company Visa, is a fintech that wears several hats, from data provider or conduit to builder or enhancer of APIs working with that data. Fintech startups such as Robinhood, Betterment, Acorns and Venmo use the provider to help its users connect their bank accounts to their services, but advisors will know Plaid through its acquisition of account aggregation provider Quovo in January 2019.
According to the complaint, Plaid is using dummy bank login pages decorated with TD Bank logos, trademarks and the bank’s name to create a sense of trust for customers and gather their login data for the bank. Once customers input their bank information, Plaid stores the information on its servers and then also takes whatever data it’s able to collect from the user’s banking activity to sell to third parties, according to the suit.
Plaid is able to gather data such as transactions, balances, investments, assets and loans.
TD Bank wants the court to force Plaid to stop using its names, logos and trademarks.
“We believe that transparency is vital when consumers are using Plaid's product and third-party financial apps. TD's customers have a right to know who they are sharing their account and financial information with, and how their personal information will be used,” said Braca.
The fintech company said it was surprised by the suit, especially since the two companies have an ongoing "discussion" about the issue.
"Plaid is not using TD Bank’s trademarks in an unfair way. Plaid's role and involvement are made clear and our flow helps consumers ensure they select the right account to link to their apps. We have been working with TD for quite some time, and are disappointed that they resorted to litigation and false allegations—Plaid is publicly known for never selling or renting consumers’ personal information," said Plaid.