The U.S. Federal Trade Commission (FTC) is reportedly launching a major lawsuit against Hims & Hers Health Inc. (NYSE:HIMS), claiming the telehealth company unlawfully shared sensitive customer health information with online advertisers and utilized deceptive billing tactics.
Data Shared With Tech Giants
Reuters on Wednesday reported that the FTC claims that sensitive medical data was improperly funneled to digital advertising firms, specifically highlighting Meta Platforms Inc. (NASDAQ:META) and Snap Inc. (NYSE:SNAP).
The confidential information was reportedly harvested through user interactions on the telehealth provider’s website and via embedded tracking technologies.
Benzinga reached out to the company for comments/statement, and they said, “This lawsuit disregards substantial evidence we provided the FTC during its nearly three-year investigation, ignores established state laws and industry standards in telehealth, and contorts the law to try to manufacture claims. This is not enforcement grounded in consumer protection; it is an effort to generate headlines at our expense. We are confident in our position and will vigorously defend ourselves against these baseless claims.”
“We’ve long shared the goal of the FTC’s new Healthcare Task Force to create a more competitive, innovative, affordable, and higher-quality healthcare system.”
Questionable Prescription Charges
According to an FTC spokesperson speaking to Reuters, the platform frequently charges individuals for medications before they have even consulted with a qualified medical professional.
According to the agency, a majority of patients never actually receive a formal consultation. Instead, they are promptly billed for prescriptions shortly after completing an initial online intake questionnaire.
The lawsuit will also allege that the company intentionally creates administrative hurdles, making it exceptionally difficult for customers to cancel their recurring subscriptions once enrolled.
Hims & Hers Response
According to Reuters, the telehealth provider vehemently denied the allegations, telling Reuters that the government’s case completely ignores significant evidence presented by the company during a nearly three-year inquiry.
Representatives stated the firm remains extremely confident in its legal position and plans to vigorously defend itself against what it characterized as entirely “baseless claims.”
Latest Earnings
Hims & Hers Health posted a first-quarter loss of 40 cents per share, missing analyst estimates for earnings of 4 cents per share.
Revenue totaled $608.1 million, below the Street consensus estimate of $616.9 million, according to Benzinga Pro data.
For the second quarter, the company expects revenue in the range of $680 million to $700 million, above analyst estimates of $642.95 million. Adjusted EBITDA is projected between $35 million and $55 million.
HIMS Price Action: Hims & Hers Health shares were down 10.91% at $26.12 at the time of publication on Wednesday, according to Benzinga Pro data.
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