Shares of telehealth provider Hims and Hers experienced a 10% decline following a lawsuit filed by the Federal Trade Commission (FTC) on July 29, 2026. The FTC, alongside Los Angeles County and Utah regulators, accused the company of improperly sharing sensitive user health data with advertising platforms like Meta and Snap without obtaining proper consent. Additionally, the lawsuit alleges that Hims and Hers charged customers for prescriptions prior to consultations with healthcare providers and created obstacles for subscription cancellations.

The complaint highlights that Hims and Hers’ data sharing was inconsistent with privacy promises made to users, raising concerns about consumer protection in online health services. The allegations also charge the company with billing customers after intake forms rather than post-consultation, which could mislead users regarding the timing and necessity of payments. Regulators further claim that subscription cancellation policies were structured to prevent easy termination, amplifying frustration among subscribers.

Hims and Hers responded swiftly on social media platform X, denying any wrongdoing and criticizing the lawsuit as unsupported and a distortion of the law. The company referenced the nearly three years of FTC investigation and declared confidence in its compliance, signaling plans to contest the legal action vigorously. It also mentioned that settlement discussions had occurred earlier, accompanied by a $15 million provisioning for potential losses disclosed in May 2026, reflecting the ongoing financial risk.

The lawsuit intensifies scrutiny on Hims and Hers as it grows in the telehealth sector, particularly within the booming weight loss medication market. Founded on virtual appointments and direct-to-consumer prescription deliveries, the company has faced several probes over recent years, including issues related to advertising and the safety of compounded medications. This latest legal challenge could impact its reputation and market position amid ongoing regulatory reviews and evolving telehealth standards.