The Federal Trade Commission has reached a settlement with online mental health company BetterHelp over allegations it shared consumers’ sensitive health information with advertisers like Facebook and Snapchat from 2013 through 2020, according to a new proposed order.
As part of the deal, Teladoc-owned BetterHelp would be banned from sharing consumer data with third parties for marketing purposes, and must change its business practices around data use.
BetterHelp will also pay $7.8 million to consumers as part of the settlement, which needs to be approved by a federal judge.
BetterHelp did not have to admit wrongdoing for the settlement, and said it is committed to member privacy in a statement posted to its website Thursday.
This is the first FTC action that returns funds directly to consumers with compromised health data, according to the agency.
FTC commissioners voted 4-0 to issue the complaint against BetterHelp, as the Biden administration becomes increasingly active in cracking down against the sharing of personal health data without consumer knowledge or consent.
BetterHelp offers a range of online mental health services, including counseling aimed at Christians, teens and LGBTQ individuals.
Consumers interested in getting care through BetterHelp need to fill out a questionnaire that asks for sensitive information, such as whether they’ve experienced depression or suicidal thoughts and what medications they’re taking, according to the FTC complaint.
BetterHelp also asks for identifiable information, like email addresses and birth date, before matching consumers with a counselor, regulators said.
At several points in that signup process, BetterHelp promised consumers that it wouldn’t disclose their personal health information except in limited circumstances, like providing counseling. However, BetterHelp shared consumers’ health questionnaire information to Facebook, Snapchat, Criteo and Pinterest for advertising purposes, the FTC alleges.
That information was allegedly used to retarget ads to consumers. For example, BetterHelp gave Facebook consumers’ email addresses and the fact that they’d previously been in therapy, and instructed Facebook to identify similar consumers and target them with ads for BetterHelp, according to the complaint.
That helped BetterHelp bring in tens of thousands of new paying users, and millions of dollars in revenue, the FTC said.
BetterHelp also didn’t limit how third parties like Facebook could use that data internally, including for R&D or advertising, the FTC said.
"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,” Samuel Levine, the director of the FTC’s consumer protection bureau, said in a statement. “Instead, BetterHelp betrayed consumers’ most personal health information for profit.”
BetterHelp halted its practices in 2020, after numerous reports of data misuse sparked the FTC investigation, the complaint says.
BetterHelp said data sharing for targeted advertising is an “industry-standard practice” that is “routinely used by some of the largest health providers, health systems, and healthcare brands. Nonetheless, we understand the FTC’s desire to set new precedents around consumer marketing, and we are happy to settle this matter with the agency,” according to the company’s statement.
The proposed order forbids BetterHelp from disclosing health data for advertising and misrepresenting its sharing practices.
It also requires BetterHelp to get clear consent from consumers before sharing personal health information to third parties; direct third parties to delete BetterHelp consumers’ personal health data; put a comprehensive privacy program in place; and delete personal health information after a certain amount of time.
The $7.8 million settlement will be used to partially refund consumers who used BetterHelp between August 2017 and December 2020, the FTC said.
The agency has been increasingly aggressive in penalizing digital health companies for sharing consumer data with third parties, often for marketing purposes. Concerns about health data privacy ramped up sharply after the Supreme Court’s decision last summer overturned Roe v. Wade, outlawing abortion in many U.S. states.
Thursday’s action mirrors one from earlier this year against GoodRx. The FTC in February ordered the digital health company to stop sharing user health data with advertisers and fined it $1.5 million.
Regulators have also taken action against women’s health app Flo and data broker Kochava.
Yet some argue tech giants aren’t doing enough to protect consumers. In November, 10 state attorneys general asked Apple to enact stricter privacy controls for third-party apps on its app store that collect sensitive medical information.
And it could soon become more difficult to collect, analyze and profit from Americans’ information. The FTC proposed rulemaking last summer to enact stronger protections for Americans’ data privacy by cracking down on businesses that collect and sell consumer data.
BetterHelp has been the main driver of revenue growth for telehealth provider Teladoc over the past two years. The division contributed upwards of $1 billion in revenue in 2022 — close to half of Teladoc’s topline — amid strong consumer demand for mental healthcare.
