Hims and Hers FTC lawsuit sends shares down about 10%
The FTC says Hims & Hers mishandled health data, billed before consults and hindered cancellations; the company denies wrongdoing.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Hims & Hers shares fell about 10% Wednesday after the Federal Trade Commission sued the telehealth company over privacy, billing and subscription practices, CNBC reported. The Hims and Hers FTC lawsuit adds a court fight to regulatory scrutiny that the company says it will contest.
The FTC, joined by Los Angeles County and Utah, said Hims & Hers gave users’ health-related information to online advertising platforms, including Meta and Snap, through tracking tools on its website. According to the agency, those practices did not match the company’s stated commitments to protect users’ health data.
Why did the FTC sue Hims & Hers?
The FTC accused Hims & Hers of misleading consumers on several fronts. Regulators said the company billed customers for prescriptions before they had spoken with a health care provider, with many charges allegedly occurring after users completed an intake form rather than after a consultation.
The agency also alleged that Hims & Hers made subscriptions hard to cancel. Together, the claims focus on how the company handled personal health data, when it charged customers and how it treated users who wanted to stop recurring services.
Hims & Hers rejected the allegations in a post on X. The company said the FTC’s case ignored evidence it provided during an investigation that lasted nearly three years and said regulators were trying to create claims unsupported by the law.
The company said it is confident in its position and plans to defend itself. Hims & Hers said it had not admitted wrongdoing.
What does the stock drop show?
The share decline came after the FTC announced the lawsuit, according to CNBC. For readers looking for the basics of how company news can be reflected in trading, News.cx has a guide to stock market mechanics.
Hims & Hers has become a large name in telehealth, including in the market for weight-loss treatments, CNBC reported. The company offers online appointments and prescriptions for weight loss drugs, erectile dysfunction, hair loss and mental health medications, with products shipped to customers.
How did the dispute get here?
The FTC investigation began in October 2023, CNBC reported. In April, the agency formally told Hims & Hers its findings, and settlement discussions began, according to company disclosures cited by CNBC.
In May, Hims & Hers disclosed a $15 million probable-loss accrual tied to the matter and warned that the final cost could be materially higher. The company said at the time that it had made a settlement offer without admitting wrongdoing.
CNBC has also reported on scrutiny of other parts of Hims & Hers’ business, including its Super Bowl advertising and compounded weight-loss drugs. The FTC’s lawsuit moves the privacy, billing and cancellation dispute from talks with regulators into litigation.
This story draws on original reporting from CNBC.