TD Bank sues Plaid for trademark infringement, false advertising

TD Bank filed a lawsuit Wednesday accusing the data aggregator Plaid of trademark infringement and false advertising, saying the company is unlawfully using the bank’s name, trademarks and logos when Plaid’s fintech clients use its technology and services to link bank accounts and financial data to their financial and payment apps.

According to the complaint, Plaid has knowingly created a user interface that uses the TD and TD Bank trademark, logos and green color scheme to mimic TD’s actual login page and “dupe [TD customers] into believing they are entering their sensitive personal and financial information in the bank’s trusted and secure platform.” TD accuses Plaid of storing the login information on Plaid’s servers and mining it for transaction history and other information that can be sold to third parties.

Plaid did not immediately respond to a request for comment.

The lawsuit, which was filed in the U.S. District Court for the District of New Jersey, follows years of similar complaints from banks about the way Plaid fetches customer account data, which historically has been achieved by screen scraping, which is accomplished by retrieving usernames and passwords, logging in to mobile or online banking using those credentials, and copying and pasting the latest account data.

In December, PNC Financial Services Group in Pittsburgh raised concerns about data aggregators including Plaid, objecting to the way they represent the bank on their apps. Last fall, Wells Fargo reached an agreement with Plaid under which the company would pull customer data directly from the bank instead of scraping it and supplying it to fintech clients. Wells supported the change, saying it was faster, more reliable and secure. Plaid, which is based in San Francisco, has similar agreements with JPMorgan Chase and other banks.

TD, the U.S. subsidiary of Toronto-Dominion Bank headquartered in Toronto, said it first raised concerns with Plaid in the spring. It sent a letter on April 17 that accused the company of trademark infringement and unfair competition and demanded Plaid stop using the bank’s logo and branding. According to TD, Plaid denied liability on May 1 and refused to change its practices. Three days later, a consumer class action was filed against Plaid, alleging deception and fraud in the way the company collects, stores, aggregates and monetizes consumers’ financial credentials and transactions.

“After repeated attempts to work through these issues with Plaid, TD is taking legal action to protect our customers and our brand,” Greg Braca, TD Bank's president and CEO, said in a news release. “Plaid’s intentional, unauthorized use of TD’s name, trademarks and logos is deceptive. By mimicking TD’s login screen, Plaid creates the false impression that consumers are engaging directly with TD Bank or entering their banking credentials into TD’s secure digital and mobile app platforms or a platform authorized by TD, when that is not the case.”

TD is seeking monetary compensation, including up to $2 million in statutory damages for “each type of service sold, offered for sale or distributed by [Plaid] under the TD marks”; no less than $75,000 in actual damages; and punitive damages in an amount to be determined.

A TD spokesman could not provide the estimated total damages or clarify how many types of services are at play in statutory damages.

Plaid, which was founded in 2013, agreed in January to be sold to Visa. The deal has not received regulatory approval.

In July, the company was sued by two Californians who alleged data privacy violations.