[Federal Register Volume 90, Number 135 (Thursday, July 17, 2025)]
[Notices]
[Pages 33379-33381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-13407]
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FEDERAL TRADE COMMISSION
[File No. 232 3040]
Southern Health Solutions, Inc., et al.; Analysis of Proposed
Consent Order to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis of Proposed Consent Order to Aid
Public Comment describes both the allegations in the complaint and the
terms of the consent order--embodied in the consent agreement--that
would settle these allegations.
DATES: Comments must be received on or before August 18, 2025.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write ``NextMed; File
No. 232 3040'' on your comment and file your comment online at https://www.regulations.gov by following the instructions on the web-based
form. If you prefer to file your comment on paper, please mail your
comment to: Federal Trade Commission, Office of the Secretary, 600
Pennsylvania Ave. NW, Mail Stop H-144 (Annex W), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Christine DeLorme (202-326-2095),
Attorney, Division of Advertising Practices, Bureau of Consumer
Protection, Federal Trade Commission, 400 7th St. SW, Washington, DC
20024.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec. 2.34, 16 CFR
2.34, notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been
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filed with and accepted, subject to final approval, by the Commission,
has been placed on the public record for a period of 30 days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
at https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before August 18, 2025.
Because of heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the https://www.regulations.gov
website. If you prefer to file your comment on paper, write ``NextMed;
File No. 232 3040'' on your comment and on the envelope, and send it
via overnight service to: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex W),
Washington, DC 20580. Your comment--including your name and your
state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the https://www.regulations.gov website.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule Sec. 4.9(c). In
particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for
the request and must identify the specific portions of the comment to
be withheld from the public record. See FTC Rule Sec. 4.9(c). Your
comment will be kept confidential only if the General Counsel grants
your request in accordance with the law and the public interest. Once
your comment has been posted on the https://www.regulations.gov
website--as legally required by FTC Rule Sec. 4.9(b)--we cannot redact
or remove your comment from that website, unless you submit a
confidentiality request that meets the requirements for such treatment
under FTC Rule Sec. 4.9(c), and the General Counsel grants that
request.
Visit the FTC website at https://www.ftc.gov to read this document
and the news release describing the proposed settlement. The FTC Act
and other laws the Commission administers permit the collection of
public comments to consider and use in this proceeding, as appropriate.
The Commission will consider all timely and responsive public comments
it receives on or before August 18, 2025. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a consent order from
Southern Health Solutions, Inc., which does business as NextMed
(``NextMed''), Robert S. Epstein, and Frank Pat Leonardo, III
(collectively, ``Respondents''). The proposed consent order (``proposed
order'') has been placed on the public record for thirty days for
receipt of comments from interested persons. Comments received during
this period will become part of the public record. After thirty days,
the Commission will again review the agreement and the comments
received and will decide whether it should withdraw from the agreement
and take appropriate action or make final the agreement's proposed
order.
This matter involves the NextMed telehealth platform and NextMed's
weight-loss programs that provided consumers with access to medical
providers who would provide prescriptions for GLP-1 drugs for weight
loss, such as Ozempic and Wegovy. The complaint alleges that
Respondents engaged in multiple deceptive and unfair practices in
violation of sections 5 and 12 of the FTC Act. It alleges that they
misrepresented that the price of NextMed's weight-loss membership
programs included the medication cost for Wegovy, Ozempic, or another
GLP-1 drug, as well as the cost of other services that were required to
obtain a prescription for such a drug. The complaint further alleges
that Respondents made unsubstantiated claims that participants in
NextMed's weight-loss programs lose on average 53 pounds and 23% of
their body weight. The complaint also alleges that Respondents
misrepresented that testimonials represented the genuine experiences
and opinions of ordinary and impartial NextMed clients, and that
Respondents took numerous actions with respect to consumer reviews to
distort or misrepresent what consumers thought of their services.
According to the complaint, Respondents unfairly charged consumers
without obtaining their express informed consent and deceptively failed
to disclose or adequately disclose: that consumers who purchased
NextMed's weight-loss programs were obligated to a one-year membership
term; that consumers would be charged every 28 days for their
membership; the total costs associated with the membership; the
existence of an early termination fee and the cost of that fee; and
significant restrictions and limitations in policies pertaining to
cancellations and refunds. The complaint also alleges that Respondents'
purposeful actions to make it difficult to cancel or obtain a refund,
and their failure to maintain sufficient personnel or technological
capacity to handle customer service requests, caused delays in
processing cancellation and refund requests that caused or were likely
to cause substantial injury to consumers. Finally, the complaint
alleges that Respondents violated the Electronic Fund Transfer Act and
its implementing Regulation E, by debiting bank accounts on a recurring
basis without obtaining a written authorization from consumers for
preauthorized electronic fund transfers, and without providing a copy
of that authorization to purchasers.
The proposed order includes injunctive relief that prohibits these
alleged violations and prevents similar and related conduct to prevent
the Respondents from further violating the law. The provisions of the
order apply to any product or service. Provision I prohibits various
misrepresentations including: (a) that the cost of a
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telehealth service includes the cost of medical consultations or
appointments, lab work, or a drug, supplement, or other medical
treatment; (b) that a product or service is free or without cost or
obligation; (c) about the cost or price of a product or service, the
total cost to obtain it, or the amount that a consumer will be charged;
(d) that a consumer will not be charged for a product or service; (e)
about the timing or manner of any charge or bill; (f) that a consumer
purchased or agreed to purchase a product or service, or that a
transaction has been authorized by a consumer, or that a customer is
obligated to pay any charge for which the customer has not given
express informed consent; (g) about the existence of a negative option
feature or its terms; or (h) about any other fact material to consumers
concerning the nature or terms of a refund, cancellation, exchange, or
repurchase policy of a product or service, or about the performance,
efficacy, nature, or central characteristics of a product or service.
Provision II prohibits any representation about the average or
typical results or benefits achieved by users of a product or service,
unless it is non-misleading and supported by competent and reliable
evidence. Provision III prohibits any misrepresentation: (a) that an
endorsement or review of a product or service is truthful or by an
actual user, or (b) about the status of any endorser or person
providing a review.
Provision IV prohibits charging a consumer without first obtaining
the consumer's unambiguously affirmative consent to be charged. In
doing so, respondents must disclose clearly and conspicuously, and in
close proximity to any request for billing information, certain
information, including the name of the seller, a description of the
product or service, the length of any contract, the amount and timing
of every charge, and all material limitations or conditions applicable
to the purchase, receipt, or use of the product or service. Respondents
also must maintain records of verification of consumers' consent for at
least three years.
Provision V requires the clear and conspicuous disclosure of all
material terms and conditions of any cancellation or refund policy
before asking consumers to pay money or provide their billing
information. It also requires providing a simple mechanism by which
consumers can request a cancellation or refund. The provision prohibits
denying a cancellation or refund request based on a minimum contract
length or imposing an early termination fee unless those requirements
were disclosed clearly and conspicuously prior to purchase. It also
prohibits failing to promptly honor any consumer's cancellation or
refund request that complies with policies in effect at the time of
purchase, or if a product or service was not timely provided.
Provision VI prohibits making any misrepresentation about any
endorser or reviewer of a product or service without disclosing,
clearly and conspicuously, and in close proximity to that
representation, any unexpected material connection between such
endorser or reviewer and any Respondent or other individual or entity
affiliated with the product or service. Provision VII prohibits
Respondents from manipulating consumer reviews to distort or
misrepresent what consumers think of a product or service, including
by: selectively soliciting reviews from individuals more likely to give
positive reviews; offering payments, refunds, or other incentives
conditioned on removing or changing negative or critical reviews or
posting positive or favorable reviews; or reporting, disputing, or
selectively reporting negative or critical reviews as false,
suspicious, or violative of policies without a reasonable basis for
doing so.
Provision VIII requires Respondents to obtain consumers'
authorization before initiating electronic fund transfers and provide
consumers with advance notice of electronic fund transfers. Provision
IX requires Respondents to pay the Commission $150,000 within eight
days of the effective date of the order. Provision X sets out
additional requirements related to the monetary relief. Provision XI
requires the respondents to provide customer information to facilitate
consumer redress. Provision XII requires Respondents to send letters to
current members of their weight-loss programs notifying them of the
Commission's action and telling the consumers how they can cancel their
memberships.
Provisions XIII through XVI of the proposed order contain reporting
and compliance provisions. Provision XIII mandates that Respondents
acknowledge receipt of the order, distribute the order to principals,
officers, and certain employees and agents, and obtain signed
acknowledgments from them. Provision XIV requires them to submit
compliance reports to the Commission one year after the order's
issuance and submit notifications when certain events occur. Under
Provision XV, Respondents must create certain records for fifteen years
and retain them for five years. Provision XVI provides for the
Commission's continued compliance monitoring of the respondents'
activity during the order's effective dates. Finally, Provision XVII
provides the effective dates of the order, including that, with
exceptions, the order will terminate in 20 years.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the complaint or proposed order, or to modify in any
way the proposed order's terms.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2025-13407 Filed 7-16-25; 8:45 am]
BILLING CODE 6750-01-P