SmileDirectClub, the company that offers orthodontic services through mail, has recently reached a settlement with the District of Columbia’s attorney general. As part of this settlement, the company has agreed to allow customers who requested refunds to speak openly about their experiences and to be released from nondisclosure agreements.
Previously, SmileDirectClub had required customers seeking refunds to agree not to discuss their experiences and to delete any negative social media posts about the company. However, with this new settlement, approximately 17,000 customers will now have the freedom to share their thoughts and opinions about the effectiveness of SmileDirectClub’s teeth aligners.
In 2020, The New York Times reported that SmileDirectClub had tied confidentiality agreements to certain refunds. This prompted the District of Columbia attorney general’s office to file a lawsuit against the company in 2022, accusing it of preventing customers who were dissatisfied or injured by their services from filing complaints with regulators or law enforcement.
The attorney general, Brian L. Schwalb, stated that SmileDirectClub had promised a simple, safe, and affordable method for teeth straightening, along with boasting five-star reviews. However, behind the scenes, the company had suppressed dissatisfied consumers and suppressed complaints about injuries caused by their products.
As part of the settlement, SmileDirectClub has also agreed to pay $500,000. The company, however, maintains its position that it did not violate any laws or engage in unfair or deceptive practices. Susan Greenspon Rammelt, the chief legal officer of SmileDirectClub, described claims of the company attempting to silence negative feedback as a “misinformation campaign.” She clarified that customers were not required to sign nondisclosure agreements if they requested a refund within 30 days of receiving their aligners and that the agreements were subject to negotiation.
SmileDirectClub insists that their release form was based on industry standards in orthodontics and that they had already planned to refine their nondisclosure provision. Their services, which are often cheaper than traditional orthodontics due to the lack of in-person visits, have faced criticism from dentist and orthodontist groups. The company has even taken legal action against some of its critics and accused California’s dental board of conspiring against competition.
SmileDirectClub went public in 2019 and managed to raise $1.29 billion with a valuation of nearly $9 billion. However, the company has yet to turn a profit as a public entity. Its stock prices have fallen below $1 per share, resulting in a valuation of $166 million.
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