Attorney General James Secures $740,000 from Online Mental Health Provider for its Burdensome Cancellation Process

OAG Investigation Found Mental Health Provider, Cerebral, Took Days to Process Cancellation Requests and Charged Patients for Services Never Provided
Cerebral Required to Pay $540,000 in Restitution to Over 16,500 New Yorkers and Establish a Simple “Click-to-Cancel” Process

New York Attorney General Letitia James today secured more than $740,000 from Cerebral, an online mental health provider, for maintaining a long and burdensome cancellation process and continuing to charge consumers after they tried to cancel. An investigation by the Office of the Attorney General (OAG) found Cerebral required subscribers to cancel by email, but then required consumers to take additional steps and wait as long as a week for their cancellation request to be processed. The investigation also revealed that Cerebral manipulated online reviews by asking its employees to submit positive reviews and hide negative reviews. Today’s agreement requires Cerebral to pay more than $540,000 in restitution to more than 16,500 affected consumers and stop its deceptive and burdensome tactics. Eligible consumers will be refunded in the original form of payment they used and do not need to take action to receive a refund.

“Making New Yorkers withstand stressful and extended delays to cancel a subscription for mental health care coverage is unacceptable,” said Attorney General James. “It is illegal and unfair to make consumers spend extra time or jump through hoops to try to cancel a subscription they no longer need. The law is clear that companies must make it easy and simple to end a subscription and my office will continue to hold them to that standard.”

Cerebral is an online telehealth company that provides consumers with mental health treatment on a subscription fee basis. Cerebral’s subscriptions provided consumers with access to virtual appointments with different types of providers, including licensed therapists, counselors, coaches, and individuals who are duly licensed and can prescribe medication. The OAG opened an investigation into Cerebral’s cancellation practices after consumers reported that they could not cancel their subscriptions.

The OAG’s investigation found that Cerebral informed subscribers they could cancel by email, but then made subscribers take a number of additional steps, such as completing a multi-question survey, before processing the cancellation. Cerebral had the ability to cancel subscriptions with the click of a button, however it allowed itself up to 72 hours to finalize cancellations – and at times took a week or more. The company used the extra time to contact subscribers with multiple retention offers to try and convince them not to cancel. When Cerebral’s delay straddled a consumer’s billing date, Cerebral charged the consumer for another month of service. The OAG’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.

The investigation also revealed that the company illegally directed its employees to manipulate online reviews of its services by anonymously posting fake reviews and by “upvoting” positive reviews or “downvoting” negative ones. Employees were also instructed 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.

Shortly after OAG commenced its investigation into the company, Cerebral started improving its cancellation process, including creating a “click-to-cancel” process and implementing other recommendations made by OAG regarding disclosure and refunds. Cerebral is also committing not to make more than one attempt to retain subscribers once they have indicated an intent to cancel.

Today’s agreement requires Cerebral to pay $200,000 in penalties and $540,162 in restitution, which will be distributed to 16,552 New York consumers who continued to be charged after submitting a cancellation request, or who canceled having never met with any provider.  Cerebral is required to pay restitution directly to consumers within 90 days, by crediting the payment account originally used for the subscription.  Consumers entitled to restitution do not need to take any action in order to receive the payment. 

Last week, Attorney General James filed a lawsuit against SiriusXM for trapping consumers in subscriptions they did not want. Attorney General James asks any consumers who have been affected by deceptive or fraudulent cancellation practices of any automatic-renewal service to file a consumer complaint online.

This matter was handled by Assistant Attorney General Adam J. Riff of the Consumer Frauds & Protection Bureau, under the supervision of Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine. The Consumer Frauds & Protection Bureau is a part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.