The US antitrust watchdog has issued a letter to the company that said the FTC was investigating whether Cerebral is engaged in unfair practices related to advertising or marketing of mental health services
FTC headquarters in Washington D.C. (Credit: Carol M. Highsmith/Wikipedia)
The US Federal Trade Commission (FTC) has commenced an investigation into SoftBank-backed mental-health start-up Cerebral.
The US antitrust watchdog has issued a letter to the company, reported by The Wall Street Journal.
The letter said FTC was investigating the possibility of Cerebral engaged in unfair practices related to advertising or marketing of mental-health services.
In its letter, the US antitrust agency asked the company a few dozens of questions related to its business and directed it to secure the documents.
FTC sought information related to the company’s programmes where it continued to charge a subscription fee from the customers until the customer cancels (negative option programmes).
Cerebral, in a statement, stated that it intends to cooperate with the FTC and is working to improve its service to patients.
Also, the company has recently tried to redesign its cancellation process.
The FTC’s Civil Investigative Demand follows the company receiving a subpoena from federal prosecutors in early May this year.
The subpoena is sent as part of an investigation into possible violations of the Controlled Substances Act.
Cerebral is engaged in providing mental health services, including consultation and prescription of medicines, through its telehealth platform.
In December last year, Cerebral raised $300m in a funding round led by SoftBank Vision Fund 2, increasing its valuation by four-folds to $4.8bn, within six months from the last fundraising.
Earlier this month, health insurer Aetna is cancelling its in-network contract with Cerebral in August this year, reported Forbes.