FTC bans online mental health company BetterHelp from sharing user data for targeted ads, as federal crackdowns on info misuse intensify

BetterHelp will pay $7.8 million for sharing user data. Shayanne Gal/Insider

• The FTC announced a settlement with BetterHelp over allegations of sharing user data with third parties.
• BetterHelp will be banned from sharing the data with outside parties for advertising, and pay $7.8 million in partial refunds.
• Users who signed up from August 2017 through 2020 may have had their data improperly shared, per the FTC.

The Federal Trade Commission is banning online therapy provider BetterHelp from sharing sensitive user data with third-party advertisers, part of a ruling that also includes a $7.8 million fine that will be used toward partial refunds for consumers.

In a Thursday ruling, the FTC said customers who signed up for the popular telehealth company from August 2017 through the end of 2020 may have had their personal information shared with social media platforms including Facebook and Snapchat, among others. 

Per the FTC, BetterHelp misled consumers by sharing personal information like email, IP addresses, and answers to health questionnaires with advertisers after promising users their information would not be shared with outside 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," Samuel Levine, director of the FTC's Bureau of Consumer Protection, said in a statement. 

He continued: "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."

Users who filled out a questionnaire indicating interest in the company or confirming they had been in therapy before may have then been shown targeted ads for BetterHelp's paid counseling programs, the FTC said. 

BetterHelp said in a statement that the settlement is "no admission of wrongdoing," and maintains it has never shared members' real names or "clinical data from therapy sessions," nor has it received payment from a third-party in exchange for user information.

"This industry-standard practice is routinely used by some of the largest health providers, health systems, and healthcare brands," BetterHelp said in a statement. "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."

Thursday's settlement is the latest action from the federal government against web-based health companies sharing private user information with advertisers, as the FTC announced a similar settlement last month with prescription drug price tracker GoodRx.

The company was similarly banned from sharing the health information of its users with advertisers, and agreed to pay a $1.5 million fine.

GoodRx issued a statement denying any wrongdoing, and said the FTC was penalizing the company for a policy that was addressed and changed about three years ago.

"We do not agree with the FTC's allegations and we admit no wrongdoing," GoodRx said in February. "Entering into the settlement allows us to avoid the time and expense of protracted litigation. We believe that the requirements detailed in the settlement will have no material impact on our business or on our current or future operations."