The Federal Trade Commission announced in May 2025 that more than $5 million in refunds had been sent to over 40,000 people harmed by online mental health provider Cerebral, Inc.'s deceptive cancellation practices, resolving a case that also alleged the company disclosed consumers' sensitive health information to third parties for advertising purposes.DOCUMENTED
The underlying settlement addressed both Cerebral's subscription-cancellation practices and its handling of consumers' protected health information, combining claims under the Restore Online Shoppers' Confidence Act with allegations tied to the sensitive nature of the data at issue.DOCUMENTED
- More than 40,000 people are receiving refunds under the FTC's settlement with Cerebral.
- The FTC alleges Cerebral required a complex, multi-step, and often multi-day cancellation process despite advertising that consumers could "cancel anytime."
- The company allegedly continued billing consumers while slow-walking their cancellation requests.
- Cerebral allegedly disclosed consumers' sensitive personal health information and other data to third parties for advertising purposes.
- The FTC found the company violated ROSCA by failing to clearly disclose material cancellation terms before charging consumers.
A promise that didn't match the process
Cerebral marketed its online mental health subscription service with the specific promise that consumers could "cancel anytime," language the FTC alleged did not reflect the actual experience of subscribers attempting to end their service. According to the FTC's allegations, cancellation in practice required navigating a complex, multi-step process that could stretch across multiple days, a burden the agency found ran directly counter to the company's own marketing promise of easy, on-demand cancellation.DOCUMENTED
Compounding the friction of the cancellation process itself, the FTC alleges Cerebral continued charging consumers during the period their cancellation requests were pending, meaning subscribers who believed they were in the process of ending their service continued to be billed while Cerebral processed, or delayed processing, their request to leave.DOCUMENTED
Sensitive health data shared for advertising
Beyond the cancellation-related allegations, the FTC's complaint against Cerebral alleged the company disclosed consumers' sensitive personal health information, along with other data, to third parties for advertising purposes — an allegation that echoes the agency's separate cases against BetterHelp and GoodRx over similar practices at other telehealth-adjacent platforms. Given that Cerebral's core service involves mental health treatment, including in some cases ADHD medication management, the health information at issue carries the same heightened sensitivity concerns the FTC has emphasized in its other telehealth privacy cases.DOCUMENTED
The ROSCA violation
The FTC's complaint alleges Cerebral violated the Restore Online Shoppers' Confidence Act by failing to clearly and conspicuously disclose all material terms of its cancellation policy before charging consumers for its subscription service. As in other ROSCA cases the FTC has brought against subscription-based businesses, the core legal theory does not require proof that any individual consumer was personally deceived; the absence of adequate up-front disclosure regarding cancellation terms is itself sufficient to establish the statutory violation.DOCUMENTED
Getting refunds to affected subscribers
The FTC's May 2025 announcement confirmed that more than $5 million in refunds had reached over 40,000 people affected by Cerebral's practices, distributed through the agency's standard combination of mailed checks and electronic payments. The agency's public data dashboards, which provide a state-by-state breakdown of consumer redress across all FTC cases, noted that FTC actions overall led to more than $339 million in consumer refunds across the country in 2024, providing broader context for the scale of redress the agency processes annually across its full enforcement docket.DOCUMENTED
Part of a broader telehealth accountability trend
The Cerebral case reflects a consistent pattern across the FTC's telehealth-sector enforcement in recent years: platforms offering sensitive health services, particularly in the mental health and prescription-management space, have faced scrutiny both for how they handle consumers' sensitive personal data and for whether their subscription and cancellation practices meet the same transparency standards required of any other auto-renewing service. Combined with its prior cases against BetterHelp and GoodRx, the Cerebral settlement reinforces that telehealth platforms handling mental health, medication, or other sensitive health data face a dual compliance burden: standard consumer-protection obligations around billing and cancellation, layered on top of heightened scrutiny given the particular sensitivity of the health information their business model depends on collecting.
The combination of billing-practice and data-privacy allegations in a single case against Cerebral reflects how frequently these two categories of harm now travel together in FTC telehealth enforcement: a platform difficult to cancel, and therefore generating a steady stream of continued billing, often has limited incentive to tighten its data-sharing practices either, since both the recurring revenue from reluctant cancellations and the advertising revenue from shared health data flow from the same underlying business model. For the more than 40,000 people who received refunds, the settlement addresses the billing harm directly, while the order's separate data-handling requirements are intended to prevent a recurrence of the health-data-sharing practices going forward.REVIEWED
Because Cerebral's core offering included ADHD medication management for some patients, the case drew particular attention from telehealth-industry observers concerned that deceptive billing and cancellation practices at a company handling controlled-substance prescribing could compound harm beyond ordinary subscription frustration, given the clinical stakes involved in patients' ongoing access to prescribed medication.REVIEWED
The FTC's continued attention to telehealth cancellation and data practices, spanning BetterHelp, GoodRx, and now Cerebral, suggests the agency views the underlying business model, subscription-based mental health and prescription services collecting inherently sensitive data, as carrying elevated compliance risk across the sector generally, rather than treating any single company's practices as an isolated case.REVIEWED
For consumers currently subscribed to any telehealth service offering mental health treatment or prescription management, the Cerebral case underscores a practical takeaway regulators have repeatedly emphasized: a marketed "cancel anytime" promise carries specific legal weight under federal law, and a subscriber who encounters unexpected friction, delay, or continued billing while attempting to cancel has grounds to file a complaint with the FTC regardless of how the underlying service characterizes its own cancellation policy in its terms of use.REVIEWED
Mental health advocates have noted that difficulty canceling a subscription carries a distinct emotional burden for patients managing conditions like anxiety or depression, since the added friction and stress of a drawn-out cancellation dispute runs directly counter to the therapeutic goals the underlying service is ostensibly designed to support.REVIEWED
Sources behind this report
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