Things aren't getting any better for Outcome Health, the digital health media company that recently settled a three-month legal battle over claims that the company misled its investors and defrauded its customers.
Now the company, which installs screens in waiting rooms and charges pharma companies and other stakeholders to advertise on them, has agreed to settle another court case, this one a class action suit by people who signed up for health tips via text message in 2015. Fierce first spotted the news.
Outcome Health will pay $2.9 million to the class, but doesn't admit any fault or wrongdoing.
Christy Griffith originally filed suit in March 2016 against Outcome Health, still known at the time as ContextMedia. Griffith said she signed up for daily nutrition tips via text messages after seeing the service advertised on one of Outcome Health's waiting room screens. At first, the messages didn't offer any way to opt out. Later, the words "To opt-out, reply STOP" were added to the text messages, but multiple repeated attempts to opt out went unanswered, and Griffith continued to receive daily texts.
The suit alleges that using an automated system to text people without their consent is a violation of the Telephone Consumer Protection Act (TCPA), including continuing to text someone who has withdrawn their consent.
According to the settlement agreement, the courts will subpeona wireless carriers to get the names of everyone who signed up for the service and received messages. Those individuals will be contacted by direct mail to instruct them on how to submit a claim to be included in the class. After a certain amount of time, the money will be distributed among the class based on the number of texts they received after opting out of the service.
Outcome Health's recent troubles began last fall when a Wall Street Journal investigation alleged that the company’s employees misled clients using inaccurate and manipulated advertisement performance data. Shortly thereafter a handful of Outcome’s top investors filed a lawsuit against the startup claiming they were misled by Outcome’s founders prior to their $487.5 million investment. This caused even more problems for the startup as hospitals and professional associations cut ties and halted expansion plans in the wake of the suit.