FTC Sues Hims & Hers as Stock Plunges on Billing, Data Claims
Federal and state regulators sued Hims & Hers Health over alleged deceptive subscription billing and unauthorized sharing of patient data with Meta and Snap, sending shares down 11% and threatening the business model underlying its 2.6 million subscribers.
The Federal Trade Commission, alongside California and Utah, filed a complaint in the Northern District of California on Wednesday. The regulators accused the telehealth company of violating the FTC Act and the Restore Online Shoppers' Confidence Act.
At the center of the complaint are allegations that Hims & Hers lured patients with "free" consultations and "Pay $0 today" prompts, only to automatically enroll them into recurring prescription subscriptions. The lawsuit cites one patient who was charged $897 before ever speaking to a healthcare professional. Another was billed $147 for a three-month supply of Lexapro after merely indicating they were "open to" medication on an intake form.
Regulators also targeted the company's cancellation and refill mechanisms. The FTC alleges Hims & Hers processed refill charges 10 days earlier than consumers would reasonably expect. This created a narrow cancellation window that was further obscured by hiding the termination option behind an "Add/remove items from order" button that never used the word cancel.
On the data front, the government accused the company of betraying its promise of a "100% online, private and secure" service. According to the complaint, Hims & Hers shared sensitive patient diagnoses—including erectile dysfunction and hair loss—with advertising platforms like Meta and Snap. The FTC noted that Hims relied heavily on paid social media influencers who reinforced this narrative of discretion to their followers.
Investors reacted sharply to the litigation, sending Hims & Hers stock down more than 11% on Wednesday. The company vigorously denied the allegations, calling them "baseless" in a statement posted on X. "This is not enforcement grounded in consumer protection; it is an effort to generate headlines at our expense," the company said.
The legal action strikes directly at the subscriber-based business model that has made Hims & Hers a closely watched player in the telehealth sector. The platform currently serves 2.6 million subscribers—a figure that grew 9% year-over-year in the first quarter—across personal health, skin care, and compounded GLP-1 weight-loss medications.
Industry analysts will be monitoring the company's Aug. 10 earnings report for any signs of customer attrition or increased legal reserves. Ultimately, the resolution of this case could establish new compliance baselines for how digital health firms design patient intake flows, manage recurring billing and utilize advertising technology.
