Penalty Amount
$7,000,000
Consumers Affected
3,200,000
The FTC settled with telehealth firm Cerebral, Inc. for sharing sensitive consumer mental health data with third parties like LinkedIn, Snapchat, and TikTok for advertising without proper consent, employing sloppy security practices, and misleading consumers about cancellation policies. Cerebral must pay over $7 million (with $2 million due upfront), is permanently banned from using health information for most advertising, must implement a comprehensive privacy program, delete unnecessary data, and provide easy cancellation.
Cerebral must pay $7 million total ($5.1 million for consumer refunds and a $10 million suspended civil penalty after a $2 million payment). The company is permanently banned from using or disclosing personal and health information for most marketing/advertising without consent, must implement a comprehensive privacy and data security program, delete most consumer data not needed for treatment/payment/operations, provide an easy cancellation mechanism, post a corrective notice on its website, and face ongoing monitoring and reporting requirements.
In-house legal teams should review all vendor agreements where Cerebral shares data with third parties (e.g., LinkedIn, Snapchat, TikTok) for advertising, focusing on data sharing clauses and consent requirements. Customer agreements, including terms of service and privacy policies, must be examined for provisions on health data usage, advertising consent, cancellation policies, and data security standards. Data processing agreements should be checked for compliance with health data protection. Required changes include adding explicit opt-in consent for using health information in advertising, prohibiting such use entirely per the order, enhancing security measures, ensuring easy cancellation processes, and updating data retention and breach notification clauses to align with the settlement.
Entity
Cerebral, Inc.
Also known as: Cerebral
Industry
HealthcareOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2024/04/proposed-ftc-order-will-prohibit-telehealth-firm-cerebral-using-or-disclosing-sensitive-data
cerebral joint stipulation order permanent injunction
https://www.ftc.gov/system/files/ftc_gov/pdf/cerebral_joint_stipulation_order_permanent_injunction.pdf
2223087cerebralcomplaint
https://www.ftc.gov/system/files/ftc_gov/pdf/2223087cerebralcomplaint.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Cerebral, Inc. has agreed to an order"
"require it to pay $7 million"
"pay more than $7 million"
"disclosed consumers’ sensitive personal health information and other sensitive data to third parties for advertising purposes"
"failed to deploy adequate safeguards for the sensitive data collected from consumers and engaged in sloppy security practices"
"failed to clearly disclose all material terms of Cerebral’s cancellation policies before charging consumers"
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$1.9M
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