BetterHelp to Refund $7.8 Million to 800,000 Customers After FTC Settlement

BetterHelp, an online therapy platform, will issue $7.8 million in refunds to nearly 800,000 customers due to a settlement with the FTC over misuse of sensitive user data. The company shared customer data with third-party companies like Facebook and Snapchat for targeted advertising without proper consent.

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Nitish Verma
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BetterHelp to Refund $7.8 Million to 800,000 Customers After FTC Settlement

BetterHelp to Refund $7.8 Million to 800,000 Customers After FTC Settlement

BetterHelp, a prominent online therapy platform, will begin issuing refunds totaling $7.8 million to nearly 800,000 customers as part of a settlement with the Federal Trade Commission (FTC). The FTC alleged that BetterHelp misused sensitive user data, including personal health information, for advertising purposes between August 2017 and December 2020.

According to the FTC's complaint, BetterHelp shared customers' email addresses, IP addresses, and answers to personal health questions with third-party companies like Facebook and Snapchat for targeted advertising. This practice violated the FTC Act, as BetterHelp failed to obtain proper consumer consent and misrepresented its compliance with HIPAA privacy regulations.

Why this matters: The misuse of sensitive user data by healthcare companies like BetterHelp can erode trust in the industry and have severe consequences for individuals who share their personal health information. This settlement serves as a warning to companies handling sensitive data, emphasizing the importance of transparency, consent, and responsible data practices in the digital age.

As part of the settlement reached in 2023, BetterHelp agreed to pay the $7.8 million in refunds without admitting to any wrongdoing. The FTC has also banned the company from disclosing consumer data to advertising platforms in the future. Eligible customers who signed up and paid for BetterHelp's services between August 1, 2017, and December 31, 2020, will receive notices about the refund process, with each payment estimated to be around $10.

Samuel Levine, director of the FTC's Bureau of Consumer Protection, emphasized the severity of BetterHelp's actions, stating, "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. Instead, BetterHelp betrayed consumers' most personal health information for profit." In response to the allegations, BetterHelp spokesperson Lou Serio maintained that the company has never received payment from third parties for user information, stating, "We do not receive and have never received any payment from any third party for any kind of information about any of our members."

The BetterHelp settlement is part of a larger crackdown by the FTC on healthcare companies misusing consumer data. In recent months, the agency has taken action against online addiction treatment company Monument and telehealth firm Cerebral for similar violations of the FTC Act involving improper sharing of sensitive health information with advertisers.

As the FTC continues to prioritize consumer privacy protection, the BetterHelp case serves as a warning to companies handling sensitive user data. With nearly $8 million in refunds set to reach affected customers, the settlement underscores the importance of transparency, consent, and responsible data practices in the digital age.