The Federal Trade Commission, along with authorities in Utah and California, has sued telemedicine company Hims & Hers for misleading consumers about its privacy, billing and subscription practices.
The FTC alleges that Hims & Hers shared consumers’ sensitive health information, including medical conditions, with third-party advertising platforms, despite claiming that its services maintained consumer privacy. Officials from Utah and Los Angeles County also joined the case.
amid complaints In a federal lawsuit, the FTC and its state and local partners allege that Hims & Hers tells consumers they can talk to a health care provider to find a treatment that’s “right for them,” but fails to clearly disclose that it charges consumers for their prescriptions immediately after they submit an intake form. The FTC also alleges that the company made it difficult for consumers to cancel subscriptions and misled consumers about keeping their health information private.
The FTC also alleges Hims shared consumer health information by sharing lists of certain customers with Meta, Snap, and other third parties. Hims also shared consumer health information through third-party tracking technology that automatically shared certain “events” (the actions of Hims website visitors) with these companies, the FTC said in its complaint.
His stock price was down 14% as of Wednesday.
Hims & Hers operates a multidisciplinary telemedicine platform that connects patients with licensed health care providers to provide personalized, direct-to-consumer care for conditions such as hair loss, sexual health, dermatology, mental health, weight management, and more. The company’s business has grown rapidly in recent years due to the rapid growth of telemedicine services for GLP-1 prescriptions. Hims & Hers initially built a large-scale weight loss business based on GLP-1 combination drugs, but this year the company’s weight loss business has undergone a dramatic transformation by scaling back on GLP-1 combination drugs and shifting its focus to branded drugs.
“The FTC’s complaint presents an alarming scenario in which consumers are unknowingly locked into subscriptions and their most private health information is disclosed to third parties without their consent,” FTC Director of Consumer Protection Christopher Mufarige said in a statement. “The FTC will not hesitate to act on behalf of consumers who have been deprived of the ability to choose the products they want and whether their most sensitive health information should be kept private.”
Hims has claimed in its ads and website that consumers can “connect” with health care providers through Hims and determine whether they need prescription drugs, the FTC alleges in the lawsuit. The FTC said in its lawsuit that consumers are required to provide billing information when filling out intake forms, despite assurances that they will not be billed unless the drug is prescribed.
But the FTC alleges that Hims does not offer most consumers consultation with providers. The FTC alleges that most consumers unknowingly apply for prescription treatments without ever having a chance to review or approve them. The FTC accuses Hims of enrolling consumers in subscription plans for these treatments immediately after receiving intake forms from consumers.
The FTC also alleged that Hims made it difficult for customers to cancel their subscriptions by requiring multiple steps and making cancellation options vague.
The complaint alleges Hims violated the FTC Act and the Restoring Online Shopper Trust Act, which prohibits false claims and subscription practices. Utah alleges violations of the Utah Consumer Sales Practices Act, and California alleges violations of California’s False Advertising and Unfair Competition Act.
“We are confident in our position and will vigorously defend against these baseless claims,” Hims & Hers executives said in a statement.
“This lawsuit ignores important evidence we submitted during the FTC’s nearly three-year investigation, ignores established state laws and industry standards regarding telehealth, and perverts the law in an attempt to fabricate claims. This is not an enforcement action based on consumer protections, but rather an effort to make headlines at our expense,” Hims & Hers said in a statement.
The company said it has long shared the FTC’s goal of creating a “more competitive, innovative, affordable, and higher quality health care system.”
“Our customers have the information they need to make informed decisions about their care and the use of our services. Our privacy policy also makes clear that our customers have choices about how their data is used and that the information they share with their healthcare providers is used only to provide care. The trust our customers place in us is the foundation of our business, and as we have grown, we have continued to enhance our processes and systems.”
