SmileDirectClub’s Abrupt Shutdown: Confusion Over Refunds And Future Payments Frustrate Customers - Forbes

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SmileDirectClub shut down operations last Friday, leaving patients confused about the future of their dental health—and their payment plans—but the company advised customers to seek future care from local dentists, continue making payments for their treatments and said the status of refunds is still in limbo.

Key Facts

SmileDirectClub, a global teledentistry company, filed for Chapter 11 bankruptcy three months before its Friday shutdown announcement, which left some patients wondering about their treatment plans and whether they still have to pay.

Customers on a SmilePay payment plan are expected to continue making payments for their treatment until they’re paid in full, even though they can’t continue their care with the company.

The company is also disbanding its Lifetime Smile Guarantee program, which offered customers free aligner touch-ups for life.

The company said all new aligner orders that haven’t been shipped were canceled, and it will no longer offer treatment, advising customers who want to finish their teeth-straightening plans to consult a local dentist so they can take over care.

Information on who’s eligible for refunds will come after the bankruptcy process is smoothed out, according to the announcement—Forbes reached out to SmileDirectClub for comment.

Customer Reactions

The shutdown confused some SmileDirectClub customers: A TikToker posted a video on Monday in which she showed up to a SmileDirectClub office for an appointment, not knowing it was closed. An X user made a post declaring he was “free” from paying his remaining $500 balance, though the company still expects customers to complete their payments. Another X user made a post asking if the company went bankrupt, noting they hadn’t ordered their retainers yet. Some customers have expressed their disapproval of SmileDirectClub’s decision to shut down. The company’s most recent Instagram post from last week has 46 likes and over 300 comments from disgruntled customers. Several stated the company’s decision to disband its Lifetime Guarantee program was a “breach of contract,” while others called for a lawsuit against SmileDirectClub. A customer on X, formerly known as Twitter, also shared her reaction to the announcement, posting the company would have to get its money “back in blood.” Another X user said in a post that the company was conducting “nasty business” for shutting down its website, making people unable to remove their payment information. SmileDirectClub’s website automatically reroutes to the shutdown announcement. Disgruntled customers in the 14,000-member r/smiledirectclub subreddit also widely voiced disappointment in the company and some shared plans to make complaints about alleged breaches of contract to negate future payment requirements.

Big Number

Over 2 million. That’s how many customers SmileDirectClub has served since its founding in 2014, according to Friday’s announcement.

Key Background

SmileDirectClub heralded itself as an affordable alternative to traditional dental care because its clear aligners cost around $2,000, whereas clear aligners from brick-and-mortar dental centers cost between $3,500 and $8,000. When SmileDirectClub filed for bankruptcy in September, the Nashville-based company reported $900 million in debt. The company’s attorney said during a bankruptcy hearing Friday it failed to close a deal that would allow its founders to provide new capital and buy SmileDirectClub out of bankruptcy, Bloomberg reported. This is because it was unable to find lenders willing to provide enough capital to keep the business open.

Tangent

The company faced controversy last year when the Washington, D.C. attorney general’s office sued it for “unfair and deceptive practices.” The suit alleged SmileDirectClub forced customers who were unsatisfied with their service to sign unlawful nondisclosure agreements (NDAs) preventing them from leaving negative online reviews. Though SmileDirectClub denied the allegations, it settled with the attorney general’s office in June. It had to pay the office $500,000 and release around 17,000 customers from their NDAs. SmileDirectClub filed a $2.8 billion defamation lawsuit in 2020 against NBC News for allegedly making “factually inaccurate, misleading and defamatory claims” against SmileDirectClub following a report that claimed the teledentistry company misled its customers, with some suggesting their aligners caused medical problems. The suit was struck down in a Tennessee court in 2021, but the teledentistry company appealed the decision in February. The British Dental Association (BDA) made a critical post about the company on X on Sunday, saying it “shouldn’t have taken a bankruptcy to protect patients from harm.” The BDA alleges the use of teledentistry from companies like SmileDirectClub has resulted in misdiagnoses and negative effects to patients’ dental health.