Attorney General of New York Letitia James announced that her office recovered $4.8 million for distribution nationwide to more than 28,000 consumers. SmileDirectClub illegally billed those customers after it went out of business, James said.
“Dental care is expensive and SmileDirectClub promised customers they would provide affordable, quality care without a price tag, but instead, they bilked hard-working people of thousands of dollars,” James said in a prepared statement Monday. “Today we are putting money back into the pockets of people who were defrauded.”
SmileDirectClub, a once-public company known for selling clear dental aligners, closed its doors in December 2023 — just months after it filed for Chapter 11 bankruptcy protection. In a surprise move, the company canceled outstanding orders and announced that its The “lifetime smile guarantee” will no longer exist. At the time, SmileDirectClub also said that “SmilePay” users were expected to continue making payments, causing confusion and frustration.
According to James announcementmost customers paid for their aligner treatments through the “SmilePay” program, which generally totaled more than $2,500 between the upfront payment and subsequent installments.
After the company went out of business in December 2023, James’ office said it received complaints from New York consumers who were told to continue paying monthly installments, despite no longer receiving treatment in return — and that it soon sent SmileDirectClub a cease-and-desist letter and giving up.
In response, SmileDirectClub referred its office to HPS Investment Partners, the company’s secured lender agent and provider of SmilePay Healthcare Finance Direct. The company was also audited its online FAQ remove the payment continuation note and direct further customer questions instead on HFD.
Settlement on Monday agreement means that affected consumers should soon experience some relief, either in the form of a “partial or full refund of their installment payments or a reduction in their future payment obligations,” according to HFD website.
If you qualify, the amount of money you receive will depend on several factors. This includes the date you first received your aligners from SmileDirectClub, if your services have already begun, how much of your treatment plan was completed at the time the company went out of business, and any outstanding balances on your account.
And not all refunds will come in the form of a settlement check. The fee will first be applied to the outstanding balance on your account — meaning that future payments, although reduced, will still remain for those who have advanced in treatment. But consumers who qualify for a refund that exceeds their outstanding account balance will see the excess amount sent back to the bank account, debit card or credit card on file. Failing that, HFD notes, a check will be mailed.
How many people end up registering for the settlement is also a factor. The total compensation plan is capped at $4.8 million, so it’s possible that returns could be slightly below or above initial estimates after all claims are received.
Some of these refunds will be automatic, but other users will only be able to submit a request directly to HFD. The deadline to submit that request is March 31, 2025. Although HFD will likely contact eligible consumers by email, more information can be found at the official website of the service provider.
Before closing its doors, SmileDirectClub served more than 2 million people since its inception in 2014. The company once promised to revolutionize the oral care industry by selling clear dental tools, by mail order and in big retailers, that were advertised as a faster and more affordable alternative to braces.
However, later, year after year, it turned out that the company was unprofitable. By the time SmileDirectClub filed for bankruptcy in September 2023, it had reported nearly $900 million in debt.
And in addition to financial problems, dental associations around the world also continued to call for caution or express opposition to direct adjusters that relate directly to the consumer — what some call do-it-yourself dentistry — citing the risks surrounding services that don’t require in-person visits to a dentist or orthodontist. This led to a lot of criticism surrounding SmileDirectClub, especially after customers saw the treatment discontinued last year, although other companies still provide similar direct straightening devices to consumers today.
