SmileDirectClub releases customers from non-disclosure agreements in settlement

SmileDirectClub, which provides orthodontic services through the mail, has agreed to release customers requesting refunds from non-disclosure agreements as part of a settlement with the Attorney General of the District of Columbia.

The settlement, announced Thursday, will allow 17,000 customers to speak publicly about their experiences with SmileDirectClub’s teeth straighteners, Attorney General Brian L. Schwalb said. The company previously asked customers seeking refunds to agree not to discuss their experience and to remove negative social media posts about the company.

In 2020, The New York Times reported that SmileDirectClub tied confidentiality agreements to some refunds. The District of Columbia Attorney General’s office sued the company in 2022, accusing it of blocking customers hurt by its services from filing complaints with regulators or law enforcement.

“SmileDirectClub promised an easy, safe and affordable way to straighten teeth and touted five-star reviews – but behind the scenes, the company silenced dissatisfied consumers and hid complaints of injuries caused by its products,” said Mr. Schwalb in a statement.

SmileDirectClub, which also agreed to pay $500,000, said in the settlement that it had not broken the law or engaged in unfair or deceptive practices.

Susan Greenspon Rammelt, SmileDirectClub’s chief legal officer, said in a statement that claims the company was trying to stop negative consumer feedback was a “misinformation campaign.” She said the company did not ask customers to sign a non-disclosure agreement if they requested a refund within 30 days of receiving their aligners and that the agreements were negotiable.

The company said the release form was modeled on one used by the orthodontics industry and that it already had plans to “more closely modify the confidentiality provision.”

SmileDirectClub’s services, which are cheaper than traditional orthodontics because they often don’t involve in-person visits, have drawn criticism from groups of dentists and orthodontists. The company has sued some of those critics and accused California’s dental board conspiracy to suppress competition.

SmileDirectClub went public in 2019, raising $1.29 billion at a valuation of nearly $9 billion. It has not made a profit as a publicly traded company. The stock has dropped to less than $1 per share and is valued at $166 million.