Cerebral Pays $740K for Slow-Walking Patient Cancellations

The agreement fines Cerebral $200,000 for its illicit practices and returns $540,000 to more than 16,500 affected consumers.

Cerebral will pay $740,000 in fines and restitution and provide a "click-to-cancel" button on its website after New York regulators cited the online mental healthcare provider for an overly burdensome cancellation process.

In a media release Thursday, New York Attorney General Letitia James says an investigation by her office found Cerebral required subscribers to cancel by email, but then forced them to take additional, needless steps such as completing a multi-question survey, before processing the cancellation.

In a media statement, Cerebral noted that it was "pleased" with the settlement and "has not admitted any wrongdoing."

"(This) allows us to move forward with a continued focus on our mission of building a new era of high-quality mental healthcare," the statement read.   

Cerebral could cancel subscriptions with the click of a button, the AG reported, but gave itself up to 72 hours to finalize cancellations – and at times took a week or more. Cerebral used the delay to badger subscribers with renewal offers, and when delays crossed a consumer's billing date, Cerebral charged them for another month of service.

The AG's investigation also found that Cerebral charged consumers for its mental health treatment services, even when it had no providers available to provide the treatment.

In addition, the AG's investigation found that Cerebral illegally ordered its employees to anonymously post and "upvote" bogus positive reviews while "downvoting" negative ones.  Employees were also ordered to contact customers directly and ask them to remove negative reviews, and to tell them, "We wouldn't want anything online to deter someone from seeking mental health care and that's really why we ask people if they are willing to" edit or remove the review, the AG's report says.

The agreement fines Cerebral $200,000 for its illicit practices and returns $540,000 to more than 16,500 affected consumers and stop its deceptive and burdensome tactics. Cerebral will pay restitution directly to eligible consumers within 90 days, crediting the payment account originally billed for the subscription.

The AG's office opened an investigation of Cerebral's cancellation practices following a rash of consumer complaints. Shortly after the AG launched the investigation, Cerebral streamlined its cancellation process to include a "click-to-cancel" process and implemented other recommendations made by regulators on disclosure and refunds. Cerebral also agreed to make no more than one follow-up attempt to retain former subscribers.

Cerebral Responds

Cerebral sent this statement to HealthLeaders.

"We are pleased to report that Cerebral has reached a settlement with the NYAG to close its investigation into Cerebral's business practices. The Company's continued commitment to evolving and improving its compliance practices, and our clinician-led leadership team's unwavering commitment to patient safety and privacy have been integral to our reaching this resolution with the NYAG. Cerebral has been transparent and cooperative throughout this process and remains committed to providing excellent care for our valued patients while upholding the highest standards in full compliance with all applicable laws."

"As acknowledged by the NYAG, shortly after the NYAG launched its investigation, Cerebral began improving its cancellation process and implementing other recommendations made by the NYAG. Cerebral recognizes that clients who have benefitted from its mental health care services may be ready to cancel their subscription and is committed to honoring those cancellation requests.
We continue our deep commitment to our patients' overall well-being, and we will continue to improve our clinical and business practices to stay compliant with the quickly evolving telehealth regulatory landscape."

"The NYAG settlement, in which Cerebral has not admitted any wrongdoing, allows us to move forward with a continued focus on our mission of building a new era of high-quality mental healthcare. We look forward to continuing to be a trusted mental health partner to all who need care.