Startup HealthEngine will face Court over allegations it disregarded or doctored more than 20,000 customer reviews and shared consumer information with third-party insurance brokers.
The competition and consumer watchdog filed Federal Court proceedings against the company on Wednesday, alleging it engaged in misleading and deceptive conduct over a five-year period from April 2014 to June 2018.
HealthEngine is an online health marketplace that lists more than 13,000 health-related service businesses on its platform, providing them with access to patients. It’s a similar model to online travel agencies such as Booking.com, but with doctors, dentists and physiotherapists.
Two of HealthEngine’s investors are subsidiaries of Telstra and SevenWest Media. Telstra declined to comment, while Seven did not respond to requests before deadline.
The Australian Competition and Consumer Commission (ACCC) will argue HealthEngine maintained a practice of manipulating customer reviews, in one case even allegedly deleting information about the quality of medical care a customer received.
“HealthEngine refused to publish negative reviews and altered feedback to remove negative aspects, or to embellish it, before publishing the reviews,” ACCC chair Rod Sims said in a statement circulated Thursday.
The company allegedly disregarded about 17,000 reviews over three years, doctoring about 3,000 — conduct the ACCC described as “particularly egregious” because customers may have visited doctors in a time of need based on manipulated information.
HealthEngine also sold names, phone numbers, email addresses and birth dates of more than 135,000 patients to private health insurance brokers without “adequately disclosing” the practice to customers, the ACCC alleges.
“Patients were misled into thinking their information would stay with HealthEngine, but instead, their information was sold off to insurance brokers,” Sims said.
“Issues of transparency and adequate disclosure when digital platforms collect and use consumer data is one of the top priorities at the ACCC.”
In a statement circulated Thursday, HealthEngine founder Marcus Tan delivered the mea culpa, implying the “rapid growth” of his company was partly to blame for its alleged non-compliance with Australian law.
“HealthEngine either discontinued or significantly overhauled the services in question over a year ago. These changes were made before HealthEngine was formally advised of any ACCC investigation,” he said.
“HealthEngine recognises that our rapid growth over the years has sometimes outpaced our systems and processes and we sincerely apologise if that has meant we have not always met the high expectations of us.”
The company did not specify whether it will contest any of the allegations.
The ACCC has been warning companies for more than five years that manipulating online reviews is not on, and has created several online resources providing guidance to businesses about their obligations.
HealthEngine is not the first company to find itself in hot water over manipulating reviews. Last year, hotel chain Meriton was fined $3 million for manipulating TripAdvisor reviews.
In HealthEngine’s case, the ACCC alleges the company only published reviews where customers said they would recommend the business and, further, embellished and modified others.
HealthEngine also allegedly selectively published star ratings next to some practices, but only if the business attracted a high score from patients.
In other cases, it allegedly told customers there was no rating for a particular business, or that there was “insufficient data” to calculate a patient satisfaction level.
“HealthEngine represented that it had not received sufficient feedback (either positive or negative) from patients … when in fact, HealthEngine had received sufficient feedback and was able to publish a practice rating, but chose not to,” the ACCC said in its initial statement of claim.
The ACCC will also allege HealthEngine maintained a practice of asking patients whether they had private health insurance, and regardless of their answer, asked them whether they wanted to receive a call about insurance comparison services.
If the customer answered ‘yes’ to this second question and then also booked an appointment through the platform, HealthEngine provided their personal information to an insurance broker, the ACCC alleges.
“HealthEngine used language in this question that indicated HealthEngine would provide the Health Insurance-Related Services (when it did not) and did not adequately disclose that if the Patient answered ‘yes’, their personal information would be sent to one of the Insurance Brokers, or that HealthEngine would receive a payment for doing so,” the ACCC said in its initial statement of claim.
About 135,000 patients had their information passed on, netting the company an unspecified sum of money. For clarity, the ACCC knows how much the company made from the practice, but redacted the figure in publicly available documents.
The ACCC will allege this practice was likely to cause patients to believe HealthEngine provided health-insurance related services and would use their information for this purpose, rather than providing it to a third party.
“Patients were not informed of the arrangements HealthEngine had with the Insurance Brokers, and therefore were unable to make an informed choice regarding the use of their personal information in this way,” the ACCC said in its initial statement of claim.
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