PaymentsMD, LLC, a health billing company and its former CEO, Michael C. Hughes, have settled with the Federal Trade Commission (FTC) over charges that they misled consumers by not telling them that the company would seek detailed medical information from third parties once they signed up at PaymentsMD's online billing portal.

The commission had accused the company and Hughes of intentionally using its Patient Portal “as a pathway to deceptively seek consumers' consent to obtain detailed medical information” about them from pharmacies, insurance companies and medical labs. The settlement calls for Hughes and the PaymentsMD to destroy information related to its Patient Health Report service and they are forbidden from deceiving customers about their data collection and use practices in the future.

Going forward they must secure the “express consent” of consumers before gathering health information from a third party.