The Department of Justice (DOJ) and Federal Trade Commission proposed telehealth company Cerebral pay a total of $7 million for its alleged sharing of patient data and deceptive business practices in violation of the FTC Act.

Cerebral was ordered to pay $5 million in consumer redress and a $10 million civil penalty, which was suspended to $2 million based on the company’s limited ability to pay, the DOJ announced in a press release Monday.

The order, pending approval by the U.S. District Court for the Southern District of Florida, requires the company to cease misusing and improperly disclosing patient information, misrepresenting its data privacy or security practices, and misrepresenting its cancellation practices.

The details: In February 2023, a bipartisan group of senators sent letters to three telehealth firms, including Cerebral, calling out the companies alleged tracking and sharing of patients’ personally identifiable health information with advertisers.

The DOJ and FTC alleged Cerebral violated the FTC Act, Opioid Act, and the Restore Online Shoppers’ Confidence Act (ROSCA) in connection with its misuse of patients’ sensitive personal health information; failure to keep that information private and secure; and use of “deceptive, burdensome, and convoluted cancellation practices.”

In May 2022, the company’s former chief executive officer, Kyle Robertson, allegedly continued to violate the FTC Act and ROSCA after leaving Cerebral to start a new business called Zealthy—later renamed Gronk—and affiliate Bruno Health P.A.

In a concurrent action, the DOJ issued an amended complaint against Zealthy, Gronk, Bruno Health, and associated executives over alleged violations of the FTC Act and ROSCA.

Compliance considerations: In April, Cerebral announced a settlement with the FTC, which required it to “implement enhanced consumer protection, privacy, and compliance measures” to further protect the personal information of its clients.

The DOJ said it will continue to pursue civil penalties, injunctive relief, and monetary relief against Robertson, Bruno Health, Zealthy, and other executives.

Company response: In an emailed statement, a Cerebral spokesperson said the company was “transparent and fully cooperative throughout the FTC’s investigation and remains committed to providing excellent care for our valued patients while upholding the highest standards of customer service, data protection, and privacy.”

The company had no comment regarding the charges against Robinson. Zealthy did not immediately respond to a request for comment.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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