Teladoc-owned BetterHelp to pay $7.8M to online therapy users for alleged data misuse, per FTC order

The Federal Trade Commission has reached a settlement with online therapy company BetterHelp, which is owned by Teladoc, over allegations that it shared consumers’ health data with companies like Facebook and Snapchat for advertising purposes.

As part of a proposed order announced Thursday, BetterHelp is banned from sharing consumers’ health data, including sensitive information about mental health challenges, with third parties for marketing and ad targeting.

BetterHelp also agreed to pay $7.8 million to consumers to settle charges that it revealed consumers’ sensitive data with third parties for advertising after promising to keep such data private, according to a FTC press release.

In a statement, BetterHelp said it does not share and "have never shared with advertisers, publishers, social media platforms, or any other similar third parties, private information such as members' names or clinical data from therapy sessions."

"We do not receive and have never received any payment from any third party for any kind of information about any of our members," according to the statement posted online about the FTC settlement.

The company said the settlement with the FTC relates to BetterHelp's advertising practices that were in effect between 2017 to 2020.

"The FTC alleged we used limited, encrypted information to optimize the effectiveness of our advertising campaigns so we could deliver more relevant ads and reach people who may be interested in our services. This industry-standard practice is routinely used by some of the largest health providers, health systems, and healthcare brands," the company said.

"We understand the FTC's desire to set new precedents around consumer marketing, and we are happy to settle this matter with the agency," the company said, noting that the settlement is not an admission of wrongdoing.

The Commission voted 4-0 to approve the settlement.

The FTC noted that it's the agency's first action returning funds to consumers whose health data was compromised.

The proposed order also bans BetterHelp from sharing consumers’ personal information with certain third parties for re-targeting—the targeting of advertisements to consumers who previously had visited BetterHelp’s website or used its app, including those who had not signed up for the company’s counseling service.

The case marks the second time that the FTC has taken action against a digital health company for alleged data misuse.

In February, the agency took enforcement action today against online pharmacy GoodRx for failing to notify customers and regulators of unauthorized disclosures of consumers’ personal health information. The action is the first of its kind under the FTC’s Health Breach Notification Rule (HBNR).

GoodRx is now prohibited from sharing user health data with applicable third parties. The telehealth and prescription drug discount provider also agreed to pay a $1.5 million civil penalty. A blog post on the GoodRx website stated that the company admits no wrongdoing but agreed to settle in order to “avoid the time and expense of protracted litigation.”

These moves signal potential increased enforcement by the FTC on the side of protecting consumer privacy.

"When a person struggling with mental health issues reaches out for help, they do so in a moment of vulnerability and with an expectation that professional counseling services will protect their privacy,” said Samuel Levine, director of the FTC's Bureau of Consumer Protection in a statement. "Instead, BetterHelp betrayed consumers’ most personal health information for profit. Let this proposed order be a stout reminder that the FTC will prioritize defending Americans’ sensitive data from illegal exploitation."

California-based BetterHelp offers online counseling services under several names, including BetterHelp Counseling, Faithful Counseling focused on Christians, Teen Counseling, which caters to teens and requires parental consent, and Pride Counseling for the LGBTQ community.

In its complaint, the FTC alleges that BetterHelp used and revealed consumers’ email addresses, IP addresses, and health questionnaire information to Facebook, Snapchat, Criteo, and Pinterest for advertising purposes, despite assurances that it would not use or disclose their personal health data except for limited purposes, such as to provide counseling services.