FTC Proposes Multi-Million-Dollar Penalty for BetterHelp to Resolve Consumer Privacy Violations

The Federal Trade Commission (FTC) has announced another enforcement action stemming from the disclosure of consumers’ sensitive health information to marketing companies for advertising purposes. The FTC has proposed a $7.8 million financial penalty to resolve alleged violations of the FTC Act by BetterHelp, a California-based provider of online counseling services.

BetterHelp offers consumers counseling services under a range of names, including BetterHelp Counseling, and more targeted services under brand names such as Faithful Counseling for Christians, Pride Counseling for the LGBTQ community, and Teen Counseling for younger customers. Consumers are required to register on its websites and complete a questionnaire, which asks them to disclose personal information such as their name, date of birth, and email address, and sensitive health information, such as medications they are taking, if they have experienced depression, and if they are experiencing suicidal thoughts. After completing the questionnaire, consumers are referred to an appropriate counselor and then pay for counseling services.

BetterHelp explains at various points in that process that the information provided by consumers will only be used for purposes related to the provision of counseling services and that the information provided will be used for other purposes; however, the FTC’s investigation revealed sensitive personal and health information was being transferred to third parties such as Facebook, Snapchat, Criteo and Pinterest, including email addresses, IP addresses, and some of the information collected through the health questionnaires for advertising purposes.

The FTC explained that in one instance, Facebook was provided with the email addresses of consumers who had previously been in therapy and was instructed to identify similar consumers and target them with advertisements for BetterHelp’s services. The FTC said the campaign helped BetterHelp bring in tens of thousands of new paying customers and generate millions in revenue. The FTC also alleged that BetterHelp pushed consumers into revealing sensitive information yet failed to protect the information it collected, did not obtain express consent to use or disclose that information to third parties, nor place limits on how third parties could use that information. The FTC also said BetterHelp also misled its users in 2020 when the company denied newspaper claims that it was disclosing sensitive user data to third parties

“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 Bureau of Consumer Protection. “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.”

The settlement has been agreed with BetterHelp but has yet to be approved. If approved, BetterHelp will be required to pay out $7.8 million in partial refunds to consumers who signed up and paid for its services. BetterHelp has also been prohibited from sharing any more consumer data with third parties for advertising or marketing purposes without first obtaining consent to do so, must notify consumers about the privacy violation, ensure it has a comprehensive privacy program in place and must limit how long personal and health information is retained.

The BetterHelp settlement was announced just a few days after the FTC’s settlement with GoodRx was approved by a judge. That settlement – which involved a ban on disclosures and a $1.5 million financial penalty – resolved similar allegations of FTC Act violations.

Author: Richard Anderson

Richard Anderson is the Editor-in-Chief of NetSec.news