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U.S. trade regulators will ban BetterHelp Inc. from sharing client data, including sensitive mental-health information, with social-media companies after allegations that the Teladoc Health online-counseling unit misused customer data over a three-year span.
Under a Federal Trade Commission settlement, Teladoc’s
TDOC,
BetterHelp would also be required to pay $7.8 million to consumers to settle the case.
The FTC alleged that BetterHelp shared sensitive data with third parties such as Meta Platforms Inc.’s
META,
Facebook, Pinterest Inc.
PINS,
and Snap Inc.’s
SNAP,
Snapchat so the companies could target ads to their customers, even after BetterHelp promised to keep such data private.
This is the first FTC action returning funds to consumers whose health data was compromised, the regulator said.
The money will be used to provide partial refunds to people who signed up for and paid for BetterHelp’s services between Aug. 1, 2017, and Dec. 31, 2020, the FTC said.
Telehealth services boomed during the pandemic, with Teladoc growing revenue from $553 million in 2019 to $2.4 billion in 2022. Teladoc bought BetterHelp in 2015 for $4 million.
BetterHelp also does business under names that seek to connect more directly with targeted audiences, such as Teen Counseling, Faithful Counseling and Pride Counseling.
The order will also ban BetterHelp from sharing personal information for re-targeting, meaning 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.
BetterHelp confirmed in a statement that it had reached a settlement with the FTC, but denied any wrongdoing.
The advertising practices in place between 2017 and 2020 were “industry-standard” and “routinely used by some of the largest health providers, health systems, and healthcare brands,” it said.
“To clarify, we do 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,” the company said.
