The FTC lawsuit alleges Hims & Hers shared users' health data with Meta and Snap via tracking tools. Shares dropped 10%. The company denies and will defend. Regulatory risk grows for the weight-loss telehealth business.
Alpha Score of 60 reflects moderate overall profile with weak momentum, weak value, strong quality, strong sentiment.
Shares of Hims & Hers Health fell 10% Wednesday after the Federal Trade Commission sued the company over its data handling and billing practices.
The FTC, joined by Los Angeles County and Utah, said the company shared users' sensitive health information with Meta Platforms and Snap through tracking tools embedded on its website. The agency said the company's privacy promises were inconsistent with what it actually did.
Customers were charged for prescriptions before they had spoken with a doctor, the FTC said. The agency also said the company made it difficult for users to cancel subscriptions.
Hims & Hers denied the allegations in a post on X. The lawsuit “disregards substantial evidence” provided during the FTC's three-year investigation, the company said. The agency “contorts the law to try to manufacture claims.” Hims & Hers said it will “vigorously defend” itself.
The lawsuit puts the company's fast-growing weight-loss drug business at the center of a regulatory dispute. Hims & Hers offers virtual appointments and prescriptions for weight loss and mental health medications, shipped directly to consumers. The business depends on user trust and a seamless subscription cycle. The FTC's claims, if proven, could undermine both.
The FTC investigation began in October 2023. In April, the agency formally communicated its findings to the company, and settlement talks followed. In May, Hims & Hers disclosed a $15 million probable-loss accrual related to the matter, warning the final cost could be materially higher. The company said it made a settlement offer without admitting wrongdoing.
Wednesday's lawsuit escalates that dispute, adding new claims. The case also comes as the company faces separate scrutiny over its Super Bowl ad and its compounded weight loss drugs, as CNBC has reported.
The company said it is confident in its position and plans to defend the case. A court date has not yet been set.
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