Visa has placed the telehealth company Hims and Hers into a monitoring program for merchants with excessive customer disputes after chargebacks in its weight-loss subscription business rose above the network's acceptable threshold in July.
Bloomberg reported the enrollment based on internal documents, and the account was widely picked up. Under the terms described, each dispute now carries an $8 surcharge, resulting in a bill of nearly $75,000 due in September. To exit the program, the company must hold its dispute rate below 1.5 percent of transactions for three consecutive months. Visa notified the company through its payment processor, Stripe.
What separates this from a routine business story is what a dispute rate measures. A chargeback occurs when a customer asks their bank to reverse a charge, usually after trying to resolve the issue with the merchant without success. A rate high enough to trigger a card network is a signal about the billing experience, and the people generating it are patients paying for weight-loss medication.
The Threshold Hims and Hers Now Has to Clear
The 1.5 percent figure is the operative number. Visa considers dispute rates below that acceptable, and the company has to stay below it for three straight months to get out.
Meeting that target generally means changing something customers experience: clearer disclosure at checkout, easier cancellation, faster refunds, or more responsive customer service. Merchants under this kind of pressure often tighten refund policies as well, which can cut both ways for consumers.
The company disputes the framing. A spokesperson told Bloomberg that Hims and Hers has seen "a relatively small number of disputed charges" and said its checkout is clear about membership and medication costs. The company declined to answer questions about the Visa program itself.
Separate from the Federal Case, but Pointed at the Same Conduct
This is a private commercial action by a payment network, not a government enforcement proceeding. It is worth keeping the two apart, because they carry different weight.
MedicalDaily previously published earlier coverage of the health privacy allegations in the federal case, which centered on claims that the company shared sensitive health information with advertising platforms despite promising privacy. The Federal Trade Commission's lawsuit against the company was filed on July 29 in the U.S. District Court for the Northern District of California, joined by Utah and by California through Los Angeles County Counsel.
The same complaint contains billing allegations that have received less attention and that overlap with what the dispute data suggests. The agency alleges the company charges most consumers for prescriptions almost immediately after they submit an intake form, despite advertising that they can consult a provider to find a treatment that is right for them, and that cancellation was made difficult by hiding the cancellation button behind several navigation steps.
The complaint describes "consumers unknowingly locked into recurring subscriptions," said Christopher Mufarrige, director of the agency's Bureau of Consumer Protection.
These are allegations. The commission files a complaint when it has reason to believe the law is being violated, and the case will be decided by the court. No court has ruled on any claim, and the company has said it will defend itself. Filings in the matter are posted on the FTC's case page.
Chargebacks Are a Last Resort, Not a First Step
Because the story is about disputes, it is worth being precise about what a dispute is and when it is appropriate, since the wrong move can leave a patient worse off.
A chargeback is a formal request to a card issuer to reverse a completed transaction. It is intended for charges that are unauthorized, for goods or services not received, or for billing that does not match what was agreed. It is not a substitute for canceling a subscription, and filing one does not end a recurring plan. A customer who disputes a charge without canceling can continue to be billed and may find their account closed while an unresolved balance remains.
The sequence that protects a patient is unglamorous. Cancel first, in writing, and keep the confirmation. Request a refund directly and give the company a reasonable chance to respond. Document dates, screenshots of the cancellation flow, and any customer service exchange. Then, if the charge stands and does not match what was agreed, contact the card issuer.
Anyone who believes a company has misled them about billing or made cancellation unreasonably difficult can file a complaint with the FTC, and complaints about a specific charge can also be filed with a state attorney general's consumer protection office.
Steps for Anyone on a Telehealth Subscription
The households with the most at stake are those on recurring weight-loss plans, where monthly costs are high, and the medication itself is something a patient may not want interrupted.
The single most useful action is to locate the cancellation path in an account before needing it, and to check what a plan actually renews at rather than what the introductory offer said. Promotional pricing on these subscriptions commonly reverts to a higher standard rate.
Nobody should stop a prescribed medication because of a billing dispute. A GLP-1 or any other prescription is a clinical matter, and a patient worried about cost should raise continuity of supply with their prescriber or pharmacist before letting a subscription lapse. Patients switching providers should first ask how to obtain their records and prescription history.
What happens next is measurable. The September surcharge bill is the first concrete consequence, and the three-month compliance window that follows will show whether the dispute rate falls. The FTC case is in its early stages, with no ruling yet. MedicalDaily will report whether the company exits the monitoring program, any changes it makes to billing or cancellation, and rulings in the federal case.
Key Questions Answered
What is Visa's Acquirer Monitoring Program? A card network program that flags merchants whose customer dispute rates exceed acceptable levels and applies per-dispute fees until the rate comes back down.
What does Hims and Hers have to do to exit? Hold its dispute rate below 1.5 percent of transactions for three consecutive months, according to the documents described in the enrollment reporting.
How much are the penalties? An $8 surcharge per dispute, amounting to a bill of nearly $75,000 expected in September.
Is this a government action? No. Visa is a private payment network. The separate FTC lawsuit filed on July 29 is the government action, and no court has ruled on it.
Has the company responded? A spokesperson said it has seen a relatively small number of disputed charges and that its checkout discloses membership and medication costs. The company has said it will defend itself in the FTC case.
Should a customer file a chargeback over a subscription they no longer want? Not as a first step. Cancel in writing, request a refund, and keep documentation. A chargeback does not cancel a subscription and can complicate an account.
Where can billing complaints be filed? With the FTC at reportfraud.ftc.gov and with a state attorney general's consumer protection office.
