As you may already know, SmileDirectClub ceased operations on Friday, December 8, 2023, leaving its customers facing unexpected challenges.
This article aims to shed light on the events surrounding the shutdown, trace the history of SmileDirectClub, and offer insights into the questions many customers are grappling with in the wake of this sudden closure.
What Happened?
SmileDirectClub faced significant financial challenges and filed for Chapter 11 bankruptcy in September, as evidenced by court filings and financial statements showing nearly $900 million in debt. On December 8th, the company announced on its website the decision to immediately cease its global operations.
As a result of this shutdown, all outstanding orders have been canceled. However, customers who were on a monthly installment payment plan are still expected to continue making their payments. Additionally, those who have completed their treatment with SmileDirectClub will no longer be eligible for the free touch-ups that were previously guaranteed as part of the company’s services. The Lifetime Guarantee that SmileDirectClub had offered is also no longer in effect.
For customers seeking refunds, the company has indicated that further information will be available once the bankruptcy process helps to determine the next steps. However, customer support, vital for addressing refunds, is no longer available. This cessation of operations has also led to the closure of all SmileDirectClub factories, resulting in the loss of jobs for all employees.
A Brief History of the Fall of SmileDirectClub
Founded in 2014 in Nashville by friends Alex Fenkell and Jordan Katzman, SmileDirectClub made a significant impact in the orthodontic industry. The company sold teeth aligners for $1,850, both online and in its shops, presenting them as a faster, cheaper alternative to traditional braces. Over nearly a decade, it served more than two million customers.
To order from SmileDirectClub, customers either made a mold of their teeth at home with a kit sent by the company or visited a SmileShop retail location for a teeth scan. These were then reviewed by the company’s network of dentists and orthodontists.
The company’s approach, which bypassed the need for in-person dental visits, drew criticism from dentist and orthodontist groups. SmileDirectClub responded to these criticisms by engaging in legal battles, including a notable accusation against California’s dental board for stifling competition.
A pivotal moment for SmileDirectClub came with its initial public offering in 2019, which valued it at $8.9 billion and turned co-founders Fenkell and Katzman into -billionaires-. However, after the IPO, the company’s stock, initially priced around $23, dropped significantly. Since going public, the Nashville-based company struggled to achieve profitability, accruing nearly a billion dollars in debt. As reported by the New York Times,
this financial turmoil was compounded by legal challenges and customer complaints accusing the company of false advertising and violating FDA regulations.
In 2022, the District of Columbia Attorney General’s office sued SmileDirectClub for blocking customers from reporting issues with its products. The company’s refund policy only offered refunds within 30 days of aligner delivery. Customers seeking refunds after this period were forced to sign nondisclosure agreements, prohibiting them from publicly discussing the refund, requiring the deletion of negative social media posts and reviews, and barring them from filing complaints with regulators or law enforcement.
The lawsuit was settled early in 2023, with SmileDirectClub agreeing to release over 17,000 customers from their nondisclosure agreements and to pay $500,000 to the district. In the settlement, SmileDirectClub maintained its stance of not having violated any laws or engaging in deceptive practices.
See also: SmileDirectClub – We Answer The Most Frequently Asked Questions
Customers Left to Fend for Themselves
The internet is full of stories of customers on ongoing treatment plans, payment plans that can’t be canceled, or those awaiting their 30-day refund.
Here are some of the stories circulating online:
ladyofthelanai said: “I had no idea SDC was in trouble, my bad for not researching. I ordered. Received an email on 12/7 that my aligners were on the way. They are not, obviously. UPS has displayed “label created” for over a week. I looked at the actual case document and UPS is one of their creditors seeking a claim in the Chapter 11. However I paid them $250 down and financed the rest through Healthcare Finance Direct (HFD). They are ready to draft my first payment in January. I emailed their support, and was told “Sorry we cannot refund or cancel your finance agreement, please see the SDC website for more info.”. There is no option to remove the credit card I used for the automatic payments. I have a dispute into Bofa. Hopefully Bank Of A will prevent future charges but my credit will suffer? HFD reports to the credit bureaus. I’m so pissed that they let me order while in the midst of bankruptcy proceedings. I told them they need to claim against SDC if they paid the $$ to SDC. I’ve sent a complaint to the Office of Consumer Credit Commissioner. Any advice?”
Source: Reddit
alfredoandanxiety said: “I’m only a week into having my aligners and I paid in full with chase. They arrived and didn’t fit and I was mid communication about canceling and refunding the day before they went bankrupt. Am going to try to dispute for a refund tomorrow. Has anyone else done so through chase and been successful? If so any suggestions on what to add. I’m very bad with talking on the phone and want to ensure I say the right things.”
Source: Reddit
BoysenberryBig7206 said: “What might happen if I cancel me debit card monthly payments. Will it affect credit score or will my account get sent to collections. From the UK”
Source: Reddit
Holiday_Coat_6781 said: “It’s honestly really sad. I was a rather new employee. Should have never been hired in the first place. I was supposed to open a new location after Christmas. Why they were signing leases and investing in new equipment for the location is beyond me. Literally had a call Friday morning about my locations set up and was let go by 3PM. No one knew. People bought aligners from my training location the day we shut down. Aligners and refunds they’ll never get. SDC will never know how they fucked up everyone’s lives. Over 12,000 people out of jobs. Completely unaware, no severance, no time to prepare, and all right before Christmas. Then SDC had the audacity to ask us to mail back their scanners. Y’all best believe every toothbrush, whitening kit, iPad, laptop, tv, down to the fake plants was picked up by us. A friend I have higher up in the company even agreeing that the directors and other high level (now ex-employees) have no intention of sending any devices back.”
Source: Reddit
Not only were ordinary customers deceived, but influencers as well. Christine Obanor, known for her appearance on the reality show ‘Too Hot To Handle,’ shares her story on TikTok.
Frequently Asked Questions
I’ve completed the treatment, yet I continue to wear their retainers. How can I obtain new ones?
SmileDitectClub treatment is no longer available, meaning that you cannot receive any new aligners or retainers, even if you had previously ordered them. SmileDirectClub has ceased its production operations, and therefore, new orders are not possible. However, if you need new retainers, you have several options, including Byte, NewSmile, and Candid.
I am in the middle of the treatment with SmileDirectClub. What should I do?
According to this email shared on Reddit SmileDirectClub has ceased its aligner production, shut down its factories, and laid off all of its employees. This series of actions has also led to the termination of their customer support services. Therefore, you won’t receive any new aligners or retainers, even if you have already ordered them. This discontinuation means you cannot continue your treatment with them. To continue straightening your teeth, you need to find a new provider. Acting quickly will help ensure you can transfer to a new treatment plan with minimal delay in your dental care.
I just ordered and paid for my first set of aligners. How can I get a refund since I’m within 30 days?
Unfortunately, getting a refund directly from SmileDirectClub is not possible at this time. Their website states, “There will be more information to come once the bankruptcy process determines next steps and additional measures customers can take,” a process that could span months or even years. However, you do have the option to contact your credit card provider for a refund, as they may offer consumer protection in such scenarios.
SmileDirectClub promised a lifetime guarantee. Does it still work?
Unfortunately, the Lifetime Smile Guarantee previously offered by SmileDirectClub is no longer in effect. According to their website, the guarantee has been discontinued effective immediately. Additionally, their customer support is not operational, and, unfortunately, you won’t be able to contact SmileDirectClub with any concerns.
My credit card was linked to automatic payments, and the platform no longer works. What can I do to block future payments?
According to SmileDirectClub’s website, SmilePay customers are still expected to continue making monthly payments until the full amount is paid as per the terms of the SmilePay program. For further questions or clarifications, you can contact Healthcare Finance Direct (HFD) at 1-877-874-3877 or via email at support@gohfd.com.
My treatment, covered in part by insurance, still needs to be completed. Can I switch to another orthodontist and have the cost covered by insurance?
Typically, orthodontic coverage in insurance plans is a one-time benefit. This means that if you have already used your orthodontic coverage for a portion of your current treatment, it’s unlikely that you can use it again for the same treatment with a different orthodontist. However, insurance policies can vary, so it’s important to contact your insurance provider directly.
I used Tabeo Finance for my SmileDirectClub treatment. Can I request a refund?
Tabeo is liable for breach of contract under section 75 of the Consumer Credit Act. You should email Tabeo requesting a full refund, citing the lack of constant care and the lifetime smile warranty promised at purchase. This includes any touch-ups or refinements if you’re unhappy with your smile at the end of treatment. If Tabeo does not respond, your next step should be to contact Citizens Advice for further assistance.
Sources
https://restructuring.ra.kroll.com/SmileDirectClub/
https://www.nytimes.com/2020/01/21/technology/smiledirectclub-smile-nda.html