Behind the Therapy App: How BetterHelp Turned Pain Into Profit

Mental health care is one of the most intimate things a person can seek out. When someone types their struggles into an intake form at two in the morning, wondering whether they should talk to someone about their anxiety or depression, they are not thinking about advertising revenue. They are just trying to get help. That trust, the kind that makes someone willing to share the most vulnerable parts of themselves with a stranger online, is exactly what BetterHelp built its business on. And it is exactly what the company chose to exploit.

In March 2023, the Federal Trade Commission reached a $7.8 million settlement with BetterHelp after finding that the company had shared sensitive user health data with platforms like Facebook and Snapchat for advertising purposes, despite repeatedly promising users that their information would remain private. It was the first time the FTC had ever returned funds to consumers whose health data had been compromised. That alone signals just how significant this case was.

What Actually Happened

BetterHelp collects a significant amount of personal information during its sign-up process. New users answer questions about their mental health history, whether they have experienced depression, suicidal thoughts, relationship difficulties, and what medications they are taking. This information is used to match people with a counselor. It is deeply personal by design.

Throughout this process, BetterHelp reassured users with statements like "Rest assured, any information provided in this questionnaire will stay private between you and your counselor." The company's website also displayed a seal referencing HIPAA, implying the company met the federal health privacy standards most people associate with doctor-patient confidentiality.

In reality, BetterHelp was uploading user email addresses, IP addresses, and health questionnaire responses to Facebook, Snapchat, Criteo, and Pinterest. The intent was to use this data to run targeted advertising campaigns, finding new users who resembled existing ones. The FTC found that this practice ran from at least 2013 through 2020 and brought the company millions of dollars in revenue and tens of thousands of new customers.

When news reports in 2020 first raised questions about BetterHelp's data sharing practices, the company denied them. The FTC later concluded that BetterHelp had doubled down on deception in its responses to consumer complaints.

The "It's Industry Standard" Defense

BetterHelp's public response to the FTC complaint was telling. The company acknowledged the settlement but framed its behavior as routine, stating that it used "limited, encrypted information to optimize the effectiveness of our advertising campaigns" and that this was "industry-standard practice" used by many large companies.

This defense deserves some scrutiny. The fact that something is common in an industry does not make it ethical, and it certainly does not make it harmless. BetterHelp is not a shoe retailer or a travel booking site. It is a mental health platform. People who sign up are not casual shoppers browsing for deals. They are individuals often navigating some of the hardest moments of their lives, and they made themselves vulnerable based on a promise that their information would stay private. The context of mental health services makes the breach of trust qualitatively different from the average data-sharing arrangement.

It is also worth noting that BetterHelp's privacy assurances were not buried in fine print. They were front and centre during the sign-up process, presented as a core part of the service offering. Users were not passive recipients of vague terms and conditions. They were actively told their information was safe.

The Broader Picture

This case sits within a much larger pattern. BetterHelp is part of a wave of digital health platforms that emerged in the last decade, promising to democratize access to mental health services. The pitch is genuinely appealing: therapy from your phone, on your schedule, at a lower price point than traditional in-person care. For many people, especially those in areas with few providers or without robust insurance coverage, these platforms filled a real gap.

But the business model underneath that pitch often depends on growth at scale, and growth at scale depends on advertising, and advertising in the digital age depends on data. The question of how to reconcile that model with the privacy expectations of people seeking mental health support was never really resolved. BetterHelp seems to have simply prioritized the former and hoped no one would notice.

The FTC's settlement required the company to do more than just pay the fine. BetterHelp was banned from sharing consumer health data for advertising going forward, prohibited from retargeting users based on their health information, and required to implement a formal privacy program. The company was also ordered to direct third parties to delete the consumer health data that had already been shared with them.

Roughly 800,000 people were eligible for partial refunds, covering those who paid for BetterHelp services between August 2017 and December 2020. Partial refunds are better than nothing, but they do not fully address what was taken. A monetary payment cannot undo the fact that someone's mental health history was quietly handed over to an advertising algorithm.

What This Reveals

The BetterHelp case is not really about one bad actor. It is about what happens when profit-driven logic is applied to spaces where human vulnerability is the core of the product. When users of a mental health platform are simultaneously the customer and the data source, the incentives become deeply misaligned.

It also raises questions about how much we rely on self-regulation and consumer trust when the stakes are this high. Most users of BetterHelp had no way of knowing what was happening to their data. The platform was designed to feel reassuring. The privacy seals, the warm language about confidentiality, the intake forms that felt like they were setting the foundation for a therapeutic relationship: all of it created an environment where scrutiny seemed unnecessary. That is precisely the kind of environment where exploitation tends to happen quietly.

Regulatory action like the FTC's settlement is important, but it also tends to arrive after the harm has already been done. Hundreds of thousands of people had their most sensitive personal information shared without their knowledge or consent before any enforcement happened. The question is whether we can build systems, regulatory, structural, and cultural, that make this kind of exploitation harder before it reaches that scale.

People seeking mental health support deserve to trust that the systems meant to help them are not quietly profiting from their pain. That should not be a radical expectation. For now, it apparently still is.

References

Federal Trade Commission. (2023, March 2). FTC to ban BetterHelp from revealing consumers' data, including sensitive mental health information, to Facebook and others for targeted advertising. https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-ban-betterhelp-revealing-consumers-data-including-sensitive-mental-health-information-facebook

Federal Trade Commission. (2024, May). BetterHelp customers will begin receiving notices about refunds related to a 2023 privacy settlement with FTC. https://www.ftc.gov/news-events/news/press-releases/2024/05/betterhelp-customers-will-begin-receiving-notices-about-refunds-related-2023-privacy-settlement-ftc

HIPAA Journal. (2023). BetterHelp settlement agreed with FTC to resolve health data privacy violations.https://www.hipaajournal.com/betterhelp-settlement-ftc-health-data-privacy/