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Hims & Hers Faces Visa Payment Probe
25 Aug
Summary
- Visa placed Hims & Hers on a monitoring program due to payment disputes.
- A rise in chargebacks linked to weight-loss subscriptions triggered the action.
- Hims faces potential $75,000 fees if dispute rate remains high.
Shares of Hims & Hers Health experienced a notable decline of approximately 8% earlier this week. This downturn followed reports that Visa has placed the telehealth provider under a special monitoring program. The program was implemented due to an increase in customer payment disputes linked to Hims' weight-loss subscription services.
Specifically, July saw a rise in card chargebacks, prompting Visa's action. Hims & Hers could incur penalties amounting to nearly $75,000 in September, with an $8 charge applied for each dispute. To exit this monitoring program, the company must maintain a dispute rate below 1.5% of transactions for three consecutive months.
This situation compounds ongoing challenges for Hims, which is already facing regulatory investigations. In July, the Federal Trade Commission and state authorities filed lawsuits against the company, citing concerns regarding billing, cancellation policies, and customer data handling. Hims has contested these allegations and stated it is addressing payment concerns.
The Visa monitoring adds further pressure on Hims' stock, as investors evaluate potential financial implications and the impact of these billing issues on customer loyalty and retention.
