A shareholder class action filed Sept. 1 against Hims & Hers Health compounds the FTC's July enforcement action, alleging the telehealth company shared consumer health data with advertisers and billed prematurely. The suit, covering purchases from Aug. 4, 2025 to July 29, 2026, adds securities claims to a regulatory probe that has already produced a Visa billing penalty and a 14.7 percent single-day share drop.
A shareholder class action filed against Hims & Hers Health Inc. extends the legal pressure on the telehealth operator beyond the Federal Trade Commission suit that erased 14.7 percent of its market value in a single session, adding a private securities claim to a regulatory probe that now spans federal and state enforcers.
The complaint, filed Sept. 1 by Glancy Prongay Wolke & Rotter LLP in the U.S. District Court for the Northern District of California as Velanki v. Hims & Hers Health Inc., covers investors who bought shares between Aug. 4, 2025 and July 29, 2026. It alleges the company shared consumers' sensitive health information with third-party advertising platforms and charged for prescriptions almost immediately after intake forms were submitted, despite telling customers they could consult a provider first.
"The company was reasonably likely to incur fees and penalties" from the conduct, the complaint alleges, arguing that positive statements about Hims's business lacked a reasonable basis. Investors have 60 days from the notice to move the court to serve as lead plaintiff under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The suit follows the FTC's July 29 action, joined by the attorneys general of California and Utah and Los Angeles County, which accused Hims of sharing health data with advertising platforms including Meta Platforms Inc. and Snap Inc. and of deceptive billing and cancellation practices. Shares fell $4.32, or 14.73 percent, to close at $25.00 that day. Hims called the claims "baseless" and said it would "vigorously defend" itself.
A second front opens on billing
The class action lands as a separate billing dispute has already produced a concrete financial cost. Bloomberg reported Aug. 21 that Visa Inc. enrolled Hims in its Acquirer Monitoring Program after customer credit-card disputes in its weight-loss subscription business exceeded acceptable levels in July. Each dispute carries an $8 surcharge, producing a bill of nearly $75,000 due in September, and Hims must hold its dispute rate below Visa's 1.5 percent threshold for three consecutive months to exit the program.
The company has said the disputed charges represent a small share of transactions and that it has taken steps to address the issue. Yet the Visa penalty cuts to the heart of the FTC's allegations, which center on whether subscription enrollment and cancellation were clear to consumers. If regulators force easier cancellation, Hims could lose subscribers and the recurring revenue that underpins its growth.
That growth remains the counterweight to the legal overhang. Hims reported second-quarter revenue of $753.2 million, up 38 percent from a year earlier, with subscribers rising 19 percent to 2.89 million and average monthly spending per subscriber up 21 percent to $92. The company raised full-year 2026 revenue guidance to $3.1 billion to $3.3 billion, and its market value stood near $7.1 billion with shares around $29.97, down roughly 38 percent over the past year.
Hims has shown it can convert regulatory friction into a commercial outcome. In February it resolved a patent dispute with Novo Nordisk A/S over compounded GLP-1 drugs by striking a partnership to sell branded Wegovy and Ozempic, a deal that sent shares up more than 40 percent. Whether the current privacy and billing scrutiny resolves as cleanly depends on whether the FTC action draws formal follow-on investigations and how much the class action and any settlement ultimately cost.
This article is for informational purposes only and does not constitute investment advice.
