WASHINGTON, D.C. – Attorney General Karl A. Racine today filed suit against SmileDirectClub, an online orthodontics company, for requiring harmed and dissatisfied consumers to sign nondisclosure agreements (NDAs) to receive promised refunds.
The Office of the Attorney General (OAG) alleges that SmileDirectClub violated District law by using NDAs to prohibit customers who sought refunds from writing online reviews, therefore misleading consumers about the safety of its products and preventing consumers from making informed purchasing decisions. OAG also alleges that SmileDirectClub used NDAs so that customers who suffered painful and sometimes permanent injuries caused by the company’s products could not file complaints with government regulators or law enforcement if they wanted to receive the promised refunds. With this lawsuit, OAG is seeking a court order invalidating these unlawful NDAs and barring SmileDirectClub from engaging in unfair and deceptive business practices in the future. In addition, OAG is seeking restitution for consumers and civil penalties, fees, and costs.
“SmileDirectClub’s ‘Lifetime Smile Guarantee’ was a sham,” said AG Racine. “Far from providing promised refunds with no strings attached, the company forced consumers to sign NDAs to get any money back after the first 30 days. These consumers were promised perfect smiles, but many suffered pain or didn’t see improvements. Forcing consumers to be silent about shoddy products and services in this way is illegal, and that’s why we’re going to make SmileDirectClub pay.”
SmileDirectClub is an online orthodontics company that sells clear dental aligners directly to consumers. The company markets aligners as a less expensive and faster alternative to braces and appeals to lower-income consumers. Consumers can order aligners by requesting an at-home kit that is mailed to them or by getting their mouth scanned at a brick-and-mortar location. Monitoring and follow-up is generally done remotely via the company’s online platform.
SmileDirectClub touts thousands of positive reviews in its marketing, but according to reports filed with the U.S. Food and Drug Administration by independent dentists, some consumers have suffered painful and permanent damage to their teeth as a result of using SmileDirectClub aligners. Other consumers filed complaints about SmileDirectClub with the Better Business Bureau or law enforcement, detailing how aligners damaged their teeth, caused severe pain, and how in some cases, they needed expensive dental procedures or surgery to fix these problems.
SmileDirectClub promises consumers that “[i]f you decide SmileDirectClub aligners aren’t for you within the first 30 days of use, we’ll refund your cost 100%. Even after the first 30 days, you can return your unused aligners for a prorated refund.” However, when consumers request a refund more than 30 days after purchasing their aligners, the company requires them to sign an extremely restrictive NDA before they can get any money back. The NDA prohibits them from making any negative comments about SmileDirectClub or its products; requires them to delete any negative reviews, social media posts, or comments they have already made; and imposes severe penalties including fines of $10,000 per violation and threats of litigation. The company requires consumers seeking refunds after 30 days to sign this NDA—even when they are requesting a refund because SmileDirectClub’s product caused significant injuries that required medical treatment. Because of these practices, important information consumers would consider when deciding whether to spend thousands of dollars on SmileDirectClub products is hidden from public view.
The District’s Consumer Protection Procedures Act (CPPA) prohibits a broad range of deceptive and unfair business practices, including misleading consumers, making misrepresentations, and failing to disclose important information about products or services. OAG alleges that SmileDirectClub violated the CPPA by:
- Requiring consumers to sign NDAs to receive promised refunds: SmileDirectClub does not disclose that if a consumer requests a refund after the first 30 days, they will be required to sign an NDA before they can recover any refund. In fact, the company attempts to completely conceal the existence of these NDAs by including a gag clause—meaning that consumers who sign an NDA are not even allowed to acknowledge that the NDA exists.
- Suppressing negative reviews and information about harm caused by SmileDirectClub aligners: SmileDirectClub aligners have caused significant pain and permanent injuries to some consumers, and the company has gone to extraordinary lengths to suppress this information. By requiring harmed and dissatisfied customers to sign NDAs to receive refunds, SmileDirectClub has suppressed negative information about its products and deprived consumers of the opportunity to make fully informed choices.
- Distorting online reviews: SmileDirectClub fails to disclose that the positive reviews they tout have been filtered and that some of the most negative ratings and reviews have been removed through the company’s use of NDAs, which require consumers seeking refunds to delete any negative reviews or comments they have already posted.
- Stopping harmed consumers from reporting problems to government regulators and law enforcement: SmileDirectClub’s use of restrictive NDAs—and its efforts to enforce them through litigation—interfere with the ability of regulators and law enforcement officials to protect the public, monitor SmileDirectClub’s compliance with the law, and remedy any misconduct. The agreement SmileDirectClub requires consumers to sign in order to receive refunds prohibits them from notifying government agencies or regulators about any problems with the company’s product, and requires them to withdraw any complaints they have already filed. The agreements also require consumers to notify SmileDirectClub if they receive a subpoena or court order to provide testimony, so that the company may take “whatever legal action [SmileDirectClub] deems appropriate,” including seeking a protective order to stop the testimony.
With this lawsuit, OAG is seeking restitution and damages for harmed consumers, civil penalties for violating District laws, and costs the District incurred by bringing this case.
A copy of the complaint is available here.
This case is being handled by Office of Consumer Protection Director Adam R. Teitelbaum, Senior Assistant Attorney General Wendy Weinberg, and Assistant Attorney General Griffin Simpson.
How to File a DC Consumer Complaint
To report scams, fraud, or unfair business practices, contact OAG’s Office of Consumer Protection by calling (202) 442-9828, emailing email@example.com, or submitting a complaint online.