Cerebral Face Substantial Penalty For Illegal Subscription Retention

by | Jan 3, 2024 | Telehealth News

The recent action taken by New York Attorney General Letitia James involves Cerebral’s mental health treatment. Cerebral offer the service on a subscription basis, and have been ordered to pay over $740,000 for engaging in practices that hindered consumers’ ability to cancel these subscriptions. This situation emerged from an investigation by the Office of the Attorney General (OAG), which revealed a complex and time-consuming cancellation process imposed by Cerebral. Customers seeking to end their subscriptions were subjected to a mandatory email cancellation followed by additional steps, including a multi-question survey, with some experiencing delays of up to a week. The investigation brought to light Cerebral’s unethical practices in manipulating online reviews. The company encouraged its employees to post positive reviews and downvote negative ones, aiming to skew public perception of its services.This settlement, necessitating Cerebral to pay more than $540,000 in restitution to over 16,500 affected consumers, portrays a major concern in the digital healthcare industry. The ease of access and convenience offered by telehealth services are often hindered by such unethical business practices. Attorney General James highlighted the illegality and unfairness of such tactics, stressing the importance of straightforward and hassle-free subscription management. Cerebral’s practices violated both consumer rights, and also potentially deterred individuals from seeking vital mental health care. The settlement includes a directive for Cerebral to cease these deceptive practices, ensuring that future cancellations are handled promptly and transparently. Eligible consumers are assured refunds directly to their original payment method without requiring any action on their part.

Cerebral’s operations offer virtual appointments with licensed therapists and counselors, which is undoubtably positive for the healthcare industry. This case does however illustrate the need for regulatory vigilance in the telehealth sector. The OAG’s investigation pointed out the disparity between Cerebral’s advertised ease of cancellation and the actual process. Cerebral’s internal mechanisms allowed for swift cancellation, yet the company deliberately prolonged this process, often crossing the billing date, resulting in unjustified charges for an additional month. This finding is troubling, considering the company also charged consumers for services when no providers were available. This practice breaches consumer trust and raises questions about the ethical responsibilities of digital health providers.

The case against Cerebral follows other scrutiny by the Attorney General’s office against companies employing deceptive subscription retention practices. A lawsuit against SiriusXM for similar practices indicates a growing concern over such business models. This trend shows a much-needed regulatory intervention in digital subscriptions, particularly in sectors as sensitive as healthcare. Consumers increasingly rely on online platforms for health services, making it important for such platforms to maintain transparency and ethical practices. The settlement with Cerebral mandates the company to enhance its cancellation process, including the introduction of a ‘click-to-cancel’ feature and limiting retention attempts. These changes are a positive move towards restoring consumer trust and ensuring that telehealth services remain a reliable resource for mental health care.

In response to the settlement, Cerebral acknowledged the need to respect clients’ decisions to cancel their subscriptions and expressed a commitment to improving its clinical and business practices. The company’s undertaking to honor cancellation requests promptly and improve its operations is a positive outcome of the Attorney General’s intervention. For consumers affected by Cerebral’s practices, the restitution process has been made straightforward. Eligible consumers will automatically receive refunds in their original form of payment, with no additional action required on their part. This approach ensures that the consumers who were wronged receive timely and fair compensation, setting a precedent for consumer protection in digital health services.

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