Hims & Hers Stock Falls Amid FTC Investigation

Telehealth company Hims & Hers Health (HIMS) stock dropped 7% after reports of a year-long FTC investigation into its advertising claims and customer cancellation practices. The FTC is looking into allegations that HIMS makes it difficult for customers to cancel subscriptions. HIMS has not been formally accused of wrongdoing, but a finding of violations could result in fines, changes to cancellation rules, or restrictions on advertising. The company faces rising regulatory and legal challenges, with a higher-than-average legal and regulatory risk exposure.

Hims & Hers Health (HIMS), a telehealth company, saw its stock drop by 7% after reports of a year-long investigation by the Federal Trade Commission (FTC) into its advertising claims and customer cancellation practices. The FTC is looking into allegations that HIMS makes it difficult for customers to cancel their subscriptions. Despite not being formally accused of wrongdoing, a finding of violations could result in fines, changes to cancellation rules, or restrictions on advertising. The company faces rising regulatory and legal challenges, with a higher-than-average legal and regulatory risk exposure.

The investigation, which began over a year ago, is examining complaints about HIMS's advertising practices and whether it has made it unnecessarily difficult for customers to cancel their subscriptions [1]. The company has not been formally accused of any wrongdoing, but the probe has been ongoing since October 2023 [2]. HIMS has acknowledged that it is voluntarily cooperating with the FTC investigation but has not provided specific details about the nature of the inquiry or the information requested by regulators [3].

The stock's decline reflects investor concerns over regulatory risks and corporate governance, as well as the company's erratic trading patterns [4]. HIMS, which serves over 2.4 million subscribers, faces mounting pressure to address consumer complaints about its service model [5]. The FTC has previously targeted companies like Amazon and Uber for similar issues, indicating a broader regulatory focus on subscription service practices [1].

The investigation highlights the need for companies to ensure that their business practices are transparent and consumer-friendly, particularly in the subscription-based service industry. As the telehealth sector continues to grow, regulatory scrutiny is likely to increase, making it crucial for companies to maintain high standards of corporate governance and consumer protection.

References:
[1] https://www.ainvest.com/news/hims-health-plunges-2-48-1-11-billion-volume-ranking-67th-ftc-scrutiny-cancellation-hurdles-2508/
[2] https://finance.yahoo.com/news/hims-hers-health-stock-drops-204846887.html
[3] https://www.investing.com/news/stock-market-news/hims--hers-health-stock-falls-amid-ftc-investigation-report-93CH-4194849
[4] https://www.bloomberg.com/news/articles/2025-08-14/ftc-probing-complaints-about-hims-ads-cancellation-practices
[5] https://seekingalpha.com/news/4485799-hims-and-hers-health-under-investigation-ftc-business-practices