Office of Public Affairs
The Justice Department, together with the Federal Trade
Commission (FTC), today announced that the United States filed an amended
complaint against telehealth company Cerebral Inc., Cerebral’s founder and
former Chief Executive Officer, Kyle Robertson; former Cerebral executive Alex
Martelli; telehealth companies Zealthy Inc., Gronk Inc. and Bruno Health P.A.
and an executive of those companies, German Echeverry. The government has
settled its claims against Cerebral, Inc. The proposed stipulated order pending
approval by the
The Justice Department continues to pursue relief arising
from its claims against Robertson and Martelli, as well as telehealth companies
Zealthy Inc., Gronk Inc. and Bruno Health P.A. and their executive German
Echeverry.
The Unlawful Conduct of Cerebral and Its Executives
The United States alleges that Cerebral and Robertson
violated the Federal Trade Commission Act (FTC Act), the Opioid Addiction
Recovery Fraud Prevention Act of 2018 (the Opioid Act) and the Restore Online
Shoppers’ Confidence Act (ROSCA) in connection with their misuse of patients’
sensitive personal health information, failure to keep that information private
and secure and use of deceptive, burdensome and convoluted cancellation
practices.
According to the amended complaint, which was filed on May
31, Cerebral and Robertson violated the FTC Act in two primary ways. First, the
company failed to protect consumers’ sensitive health information when — at
Robertson’s direction — it intentionally deployed online tracking technologies
across its website. These tracking technologies collected and transmitted
users’ information, without users’ informed consent, to third parties for
business purposes such as targeted advertisements. In doing so, the company
contravened its own express claims that its services were “private” or
“confidential,” and that it would not disclose user data to third parties
without the users’ consent.
Second, Cerebral and Robertson failed to safeguard
consumers’ sensitive data from unauthorized disclosure, despite claiming that
the company’s website offered “secure” services to do so. Cerebral’s deficient
practices led to chronic data security breaches and repeated unauthorized
disclosures of users’ sensitive health information.
The amended complaint also alleges that Robertson and
Martelli violated the FTC Act by causing Cerebral employees to falsely
impersonate patients on online review sites, post fictitious reviews praising
the company’s services and suppress authentic, negative reviews of the company.
The amended complaint further alleges that Cerebral and
Robertson violated ROSCA by failing to clearly disclose material terms related
to data privacy, data security and cancellation before obtaining patients’
billing information, by failing to obtain patients’ informed consent before
billing them, and by failing to provide consumers with simple mechanisms to
cancel their Cerebral subscriptions. As a result, Cerebral obtained millions of
dollars from consumers who unsuccessfully attempted to cancel their
subscriptions.
Finally, the amended complaint alleges that Cerebral,
Robertson and Martelli violated the Opioid Act by engaging in deceptive acts or
practices with respect to substance use disorder treatment services.
The Unlawful Conduct of Zealthy Inc. and Its Executives
The amended complaint further alleges that Robertson
continued to violate the FTC Act and ROSCA after he left Cerebral. In May 2022,
Robertson founded another telehealth company, Zealthy Inc. (later renamed Gronk
Inc.), which he heads alongside German Echeverry, its Medical Director.
According to the Amended Complaint, through Zealthy and its affiliated medical
corporation, Bruno Health, Robertson and Echeverry violated ROSCA by failing to
clearly disclose material terms of online subscriptions before obtaining
consumers’ billing information, by failing to obtain consumers’ express
informed consent to those terms before charging their credit cards and by
failing to provide consumers with a simple cancellation process to stop
recurring charges. The government also alleges that Zealthy and its executives
violated the FTC Act by committing unfair and deceptive business practices.
Such practices include billing consumers for costs they did not knowingly agree
to; misleading consumers about the terms of their telehealth subscriptions;
disregarding consumers’ cancellation requests and making it challenging for
consumers to cancel; and tracking, collecting, disclosing and using consumers’
sensitive, personal data in ways that were not fully disclosed to consumers and
that consumers did not knowingly authorize.
The department will continue to pursue civil penalties,
injunctive relief and monetary relief against Robertson, Martelli, Echeverry,
Bruno Health and Zealthy.
“The Justice Department is committed to stopping companies
and their executives from mishandling and misusing individuals’ sensitive
personal health information, and from implementing predatory billing
practices,” said Principal Deputy Assistant Attorney General Brian M. Boynton,
head of the Justice Department’s Civil Division. “Consumers who turn to
telehealth companies for treatment expect that their sensitive health
information will be handled with great care and that companies will abide by
the representations they have made rather than flouting their stated policies
for the sake of profits and growth. This case reflects the department’s
commitment to making sure that telehealth companies follow the law and
safeguard the rights of those who seek treatment from them. We will continue to
work with the FTC to vigorously enforce the FTC Act, the Opioid Act and ROSCA.”
“Companies shouldn’t take shortcuts on privacy or security,
or hinder patients from cancelling services they no longer want,” said Director
Samuel Levine of the FTC’s Bureau of Consumer Protection. “By continuing this
case against the company’s former CEO, the government demonstrates its
commitment to seeing that executives are held accountable for their
misconduct.”
Trial Attorneys Shana C. Priore, Joshua A. Fowkes, Francisco
L. Unger and Amber M. Charles of the Civil Division’s Consumer Protection
Branch and Assistant U.S. Attorney Rosaline Chan, in conjunction with staff at
the FTC’s Division of Enforcement, are prosecuting the case.
For more information about the Consumer Protection Branch
and its enforcement efforts, visit
www.justice.gov/civil/consumer-protection-branch. For more information about
the FTC, visit www.FTC.gov.
The claims made in the amended complaint are allegations
that, if the case were to proceed to trial, the government must prove by a
preponderance of the evidence.
Updated