BetterHelp, one of the largest online therapy platforms, agreed to pay $7.8 million to settle Federal Trade Commission charges that it illegally shared users’ sensitive mental health data with Facebook, Snapchat, Criteo, and Pinterest for targeted advertising purposes. The settlement, approved by the FTC in July 2023, represents a landmark enforcement action against a telehealth provider for privacy violations that affected millions of users. From June 2024 through 2025, the company distributed more than $7.8 million in refunds to customers whose personal health information was misused—including email addresses, IP addresses, and responses to detailed mental health questionnaires that users believed would remain confidential.
The core issue: BetterHelp promised users that their mental health information would be used only for therapeutic purposes, yet behind the scenes, the company systematically shared this data with social media platforms and advertising networks. This wasn’t a data breach caused by hackers—it was intentional business practice. The company shared identifiable health data for over three years before the FTC discovered and stopped the practice. Users who completed intake questionnaires asking about depression, anxiety, trauma history, and other sensitive conditions found that this information was being weaponized for behavioral targeting ads.
Table of Contents
- How BetterHelp Violated User Privacy by Sharing Mental Health Data
- The Advertiser Ecosystem Behind Telehealth Privacy Violations
- The FTC’s Landmark Enforcement Action and Permanent Ban
- How Refund Payouts Occurred and Timeline for Settlement Distributions
- Eligibility and Claiming Your Refund
- What This Settlement Means for Digital Therapy Privacy Standards
- Implications for the Telehealth Industry and Future Privacy Enforcement
How BetterHelp Violated User Privacy by Sharing Mental Health Data
Between August 1, 2017, and December 31, 2020, BetterHelp transmitted sensitive personal information to four major advertising platforms without meaningful user consent. The shared data included email addresses, IP addresses, and detailed responses from health intake questionnaires—the very forms users filled out believing their answers would remain between them and their therapist. The company used a technique called “pixel tracking,” which embeds advertising code on websites to track user behavior. When BetterHelp users interacted with the platform, their data flowed directly to Facebook’s Pixel, Snapchat Conversion Tracking, Criteo’s Conversion Pixels, and Pinterest’s Tag platforms.
This practice violated BetterHelp’s own privacy commitments. The platform’s privacy policy stated that health data would be used only for limited therapeutic purposes—processing appointments, communicating with users about their care, and improving the service. Nowhere did it disclose that mental health questionnaire responses would be shared with social media advertising networks. The sharing was systematic and extensive, affecting hundreds of thousands of users during this three-year period. For comparison, imagine disclosing your depression diagnosis to a therapist, only to learn the clinic sold that information to advertisers who then showed you ads for antidepressants, sleep aids, and stress-relief products based on your specific condition.
The Advertiser Ecosystem Behind Telehealth Privacy Violations
BetterHelp’s arrangement with advertising platforms created a troubling incentive structure. Once Facebook, Snapchat, Criteo, and Pinterest received email addresses and health questionnaire data, they could build detailed behavioral profiles of users. These platforms could then create “lookalike audiences”—finding other people similar to BetterHelp users to target with ads. A user who answered questions about social anxiety became a valuable data point for advertisers selling anxiety medications, self-help courses, and other products. The health questionnaires themselves became advertising gold, revealing not just interests but vulnerabilities.
However, the FTC’s enforcement action targeted BetterHelp specifically, not the platforms that received the data. Facebook, Snapchat, Criteo, and Pinterest were not named as defendants in this settlement. The regulatory focus was on BetterHelp’s deceptive practices—the company made promises about data use that it then broke. The advertising platforms could argue (and have in similar cases) that they received the data from BetterHelp and were simply providing the tracking services that the company requested. This doesn’t absolve them of responsibility, but it shows why enforcement against the source—the company collecting the data—is often the first legal tool used.
The FTC’s Landmark Enforcement Action and Permanent Ban
The FTC announced enforcement action in March 2023 and finalized the settlement order in July 2023, marking one of the most significant privacy enforcement actions against a telehealth provider. The settlement order permanently bans BetterHelp from sharing consumers’ sensitive health data for advertising purposes—a crucial restriction that goes beyond requiring the company to disclose the practice. The ban means BetterHelp cannot engage in this behavior again without facing additional penalties. Beyond the monetary settlement, the FTC imposed compliance requirements that reshape how BetterHelp operates.
The company must implement a comprehensive information security program, obtain independent audits to verify compliance, delete all improperly shared data, and notify users who were affected. The permanent injunction against sharing health data for advertising serves as a warning to other digital health companies. BetterHelp’s parent company, Teladoc, subsequently tightened privacy policies across all its platforms. For users of other telehealth services—whether therapy apps, counseling platforms, or mental health providers—this enforcement demonstrated that the FTC will pursue companies that misuse sensitive data, even if they’re profitable and well-established.
How Refund Payouts Occurred and Timeline for Settlement Distributions
The $7.8 million settlement fund was distributed in two waves. In June 2024, BetterHelp mailed the first notices to eligible customers, and initial refunds totaling nearly $5.2 million were distributed to users who had paid for BetterHelp services during the violation period (August 1, 2017 – December 31, 2020). These first-round recipients received checks or direct deposits based on their claims. A second round of distributions began in 2025, sending more than $2.6 million to an additional 534,000+ people who had accepted their first refund payment.
This two-stage approach allowed the FTC to verify claims in the first round and then distribute remaining funds pro-rata to confirmed claimants. The settlement administrator, hired to manage distributions, contacted users through email addresses on file. If a user’s address or payment information was outdated, they needed to update it on the official FTC settlement website to receive their check. The refund amounts varied based on how many users submitted valid claims—more claimants meant smaller individual payouts, but ensured that everyone who was affected received compensation.
Eligibility and Claiming Your Refund
To be eligible for a refund, a user had to have used BetterHelp between August 1, 2017, and December 31, 2020, and have paid out of pocket for services (insurance-covered therapy didn’t qualify because the user didn’t pay directly). Importantly, users who received the first-round refund automatically qualified for the second-round distribution—they didn’t need to submit a new claim. However, there was a critical limitation for claimants who hadn’t heard about the settlement: claim deadlines applied. The FTC settlement required claims to be filed by a specific deadline to qualify for refunds.
Users who never visited the FTC’s official settlement notice, ignored notifications, or moved without updating their address might have missed the deadline. For the first round, the deadline had already passed by the time the second round began. If you were a BetterHelp user during this period and haven’t received a notice, the best approach is to verify your name and email on the official FTC BetterHelp Refunds page rather than searching third-party settlement claim websites. The official FTC website is the authoritative source—there are no legitimate competing claim administrators for this settlement.
What This Settlement Means for Digital Therapy Privacy Standards
This case established a crucial precedent: online therapy platforms cannot use mental health data for behavioral advertising, period. Before this settlement, some digital health companies operated in a gray area, arguing that they needed to share data with advertising platforms to function or to offset costs. BetterHelp’s settlement shut that argument down. Any telehealth provider discovered sharing mental health data for advertising now faces immediate regulatory scrutiny and potential enforcement.
The settlement also forced BetterHelp to undergo structural changes. The company implemented an information security program, and independent auditors now regularly verify its compliance. For users considering BetterHelp after this settlement, the platform is now under court-ordered restrictions that actually improve privacy compared to before. However, for users of other telehealth apps, this case highlighted the importance of reading privacy policies carefully and understanding how companies make money. Some mental health apps monetize through ads, partnerships, or data sales—the BetterHelp case shows why users should scrutinize these business models.
Implications for the Telehealth Industry and Future Privacy Enforcement
The BetterHelp settlement reflects broader FTC priorities around protecting vulnerable populations. Mental health data is among the most sensitive personal information a person can share—it reveals not just medical conditions but psychological vulnerabilities. The FTC’s willingness to bring enforcement action and impose permanent bans sends a message that health data receives heightened protection under consumer protection laws. Looking forward, expect more enforcement actions against apps that monetize health data without explicit consent.
The FTC has signaled it will scrutinize fitness trackers, period-tracking apps, genetic testing platforms, and other health apps that share user data with third parties. The BetterHelp precedent also encourages state attorneys general to pursue similar cases under state privacy laws. Several states now have health privacy bills in progress that would impose stricter requirements on digital health companies. For consumers, this enforcement action validates a simple principle: your health data should be treated as sensitive, confidential information—not as a commodity to be sold to advertisers.