Fresh off accusations of fraud from its own investors, Outcome Health has agreed to pay $2.9 million to settle a class-action lawsuit claiming the company continued to send automated text messages to users despite repeated requests to opt out of the service.
The settlement resolves allegations that Outcome violated the Telephone Consumer Protection Act (TCPA) by continuing to send daily automated nutrition tips to patients that signed up for the service.
The lawsuit was originally filed in March 2016 against ContextMedia Health, which rebranded itself in January 2017 as Outcome Health. Christy Griffith, who signed up to receive daily automated nutrition tips from Outcome in July 2015 after being prompted by “a program playing in the waiting room of a doctor’s office,” according to an amended complaint (PDF) filed in January in a district court in Northern Illinois. She claimed the company continued sending automated text messages despite “no less than 25 attempts” to opt out by replying with variations of the word “STOP.”
According to the preliminary settlement (PDF), Outcome “denies all material allegations … and specifically disputes that it violated TCPA in any respect,” but agreed to settle the claims, citing the burden and expense of continued litigation. The company did not respond to a request for comment.
Outcome, which installs free tablets and flat-screen televisions in doctor’s offices across the country, partners with organizations to broadcast educational material to patients. The company generates revenue by selling ads to pharmaceutical companies and was once valued at $5.5 billion following a $500 million funding round from big-name investors in May 2017.
Months later, those investors—including Goldman Sachs and Alphabet’s growth equity fund CapitalG—sued the company for providing them with fraudulent financial documents. The two sides settled the legal dispute in January and the company’s two founders agreed to step down.
The latest settlement adds to the Outcome’s already tarnished reputation that prompted several medical groups, including the American Medical Association, to sever partnerships with the company last fall. In November, nearly 200 employees took voluntary buyouts from the company, casting doubt on Outcome’s plans to add 2,000 employees by 2022.
As part of the settlement, Outcome Health also agreed to “make all reasonable efforts” to withdraw a petition (PDF) filed to the Federal Communications Commission. The petition sought clarification about whether “an unknowable technical error” that caused “the improper processing of unsubscribe requests” is protected from liability under TCPA.