- Telehealth firm NextMed accused of hiding costs and faking positive reviews
FTC alleges misleading weight-loss promises and undisclosed one-year contracts
$150,000 settlement to fund refunds; new rules imposed on business practices
The operators of Southern Health Solutions, Inc., doing business as Next Medical and NextMed, have agreed to settle Federal Trade Commission charges that they misled consumers with deceptive weight-loss claims, hidden fees, and fabricated reviews to promote their telemedicine weight-loss programs.
According to the FTC’s complaint, New York-based NextMed, along with its founders Robert Epstein and CEO Frank Leonardo III, marketed membership programs starting in early 2022 that offered consumers access to medical providers who could prescribe popular glucagon-like peptide 1 (GLP-1) drugs like Wegovy and Ozempic.
However, while the programs were advertised at monthly rates of $138 or $188, the company failed to disclose that these fees did not cover the actual cost of the weight-loss drugs, lab work required for eligibility, or mandatory medical consultations to obtain prescriptions.
Beyond hidden costs, the FTC alleged that NextMed locked customers into undisclosed 12-month contracts with costly early termination fees and made it difficult for consumers to cancel or secure refunds due to inadequate customer service staffing.
The company also reportedly manipulated online reputation platforms by suppressing negative reviews, offering Amazon gift cards to consumers in exchange for deleting critical comments, and fabricating positive testimonials and before-and-after photos featuring individuals who had never used NextMed’s services.
“Consumers who signed up for NextMed’s programs faced significant unexpected costs and the company’s customer service failures prevented consumers from cancelling or getting a refund,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “Today’s action makes clear that companies cannot hide important information from consumers or neglect their responsibility to respond to valid complaints and concerns.”
$150,000 for consumer refunds
Under the proposed settlement, NextMed and its principals must pay $150,000, which the FTC intends to use for consumer refunds. The agreement also imposes sweeping prohibitions and requirements on the company, including:
Banning misrepresentations about telehealth costs, services included, billing practices, and refund or cancellation policies.
Requiring credible evidence for claims about weight-loss outcomes.
Prohibiting the use of fake testimonials or reviews, and mandating disclosure of any unexpected ties between the company and reviewers.
Forbidding manipulation of online reviews, including offering incentives to remove negative feedback or falsely disputing critical reviews.
Mandating clear disclosure of key terms before payment, obtaining informed consent for billing, and promptly honoring valid cancellation or refund requests.