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SmileDirectClub is shutting down. Where does that leave its customers?

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SmileDirectClub is shutting down. Where does that leave its customers?
AP
WYATTE GRANTHAM-PHILIPS
December 13, 2023

NEW YORK (AP) — Just months after filing for bankruptcy, SmileDirectClub announced it was shutting down its global operations and halting its teeth-aligner treatments.

That leaves existing SmileDirectClub customers with a lot of questions and few available answers. The company is offering no more customer care support and few details about possible refunds are available yet. Multiple dental organizations and orthodontists also caution patients about safety concerns arising from “direct-to-consumer” dentistry.

Here's what you need to know.

WHAT IS THE COMPANY AND WHY IS IT CLOSING SHOP?

SmileDirectClub — which served over 2 million people since its 2014 founding — once promised to revolutionize the oral-care industry by selling clear dental aligners that were marketed as a faster and more affordable alternative to braces. It sold its aligners directly to consumers by mail and in major retailers.

When SmileDirectClub's stock began trading on the stock market in 2019, the company was valued at about $8.9 billion. But the stock plummeted in value over time as the company proved to be unprofitable year after year. In 2022, SmileDirectClub lost $86.4 million.

With its stock price tumbling, SmileDirectClub was pressured to spend on acquiring customers to demonstrate its business could grow, said Eric Snyder, chairman of bankruptcy at the Wilk Auslander law firm.

“And then you combine that with the legal battles they had (and pushback) from orthodontics industry ... all those things together just made it really hard for them to stay competitive,” he added. “They’ve been losing just tremendous amounts of money over the last couple of years.”

SmileDirectClub filed for Chapter 11 bankruptcy protection in September while reporting nearly $900 million in debt. And earlier this month, it confirmed it was shutting down operations after being unable to find a partner willing to bring in enough capital to keep the company afloat.

WHAT ABOUT EXISTING CUSTOMERS?

In an FAQ about it shutting down operations, SmileDirectClub confirmed that its telehealth aligner treatment is no longer available.

That leaves existing customers in limbo — with many expressing confusion and frustration online. Customer orders that haven’t shipped yet have been canceled and “Lifetime Smile Guarantee” no longer exists, the company said in its Dec. 8 announcement. SmileDirectClub added that SmilePay customers were expected to continue payments — but has since updated its FAQ to direct these customers to HFD, the service provider for SmilePay, for questions.

SmileDirectClub's customer-care support has ceased. The Nashville, Tennesee, company apologized and urged consumers to consult their local dentist or orthodontist for further treatments. The company added that more details about refund requests will arrive “once the bankruptcy process determines next steps and additional measures customers can take.”

When contacted by The Associated Press for additional information shortly after this announcement, a spokesperson said SmileDirectClub couldn’t comment further.

Now that SmileDirectClub is out of business it must liquidate, Snyder noted. He said he's skeptical about compensation making its way to customers — but notes that people who signed up or made payments after the company's September bankruptcy filing will likely be prioritized.

“Unfortunately, I think they’re going to be out of luck. ... (But) if there’s any money, it’ll go to the newest customers,” Snyder told The AP earlier this month. And even when a company goes out of business, consumers still paying off services they already received will still owe that amount, he noted.

Snyder also didn't expect there to be further legal implications around the end of the “Lifetime Smile Guarantee,” for example, noting that such warranties are "only as good as the life of the company offering it."

It's unclear how many active customers SmileDirectClub had before shutting down, but American Association of Orthodontists President Dr. Myron Guymon speculates that tens of thousands of people could be affected.

“That's got to be very frustrating for them to have spent time and money in a treatment, and then all of a sudden the rug gets shoved out underneath their feet," Guymon said.

He and others advised those people to seek the care of a professionally trained orthodontic specialist, such as those listed on AAO's website.

WHAT ARE ORTHODONTISTS SAYING?

Over the years, dental associations around the world have been urging caution or expressing opposition to direct-to-consumer aligners — what some call “DIY" dentistry.

These types of aligner treatments don't require in-person visits to a dentist or orthodontist, but typically ask consumers to take molds of their teeth or a digital scan instead. This can lead to key aspects of a patient’s oral condition being overlooked and potentially lead to health consequences, some experts say.

“It’s very easy to cause harm if you’re not properly monitoring the case," Dr. Thikriat Al-Jewair, chair of the Department of Orthodontics at the University at Buffalo, said. “I cannot overstate the importance of seeing an orthodontist to monitor the care. (Moving teeth) is a very complex process and also very individualized."

Al-Jewair added that many former direct-to-consumer aligner patients end up coming to orthodontic practices for reevaluation. In these cases, she said, gum disease, bite problems and other issues often arise.

It’s important to note that SmileDirectClub isn’t the only direct-to-consumer aligner provider on the market today. The treatment's appeal and perceived benefits boil down to convenience and affordability — still, Al-Jewair notes, past demographic research has found that the majority of patients seeking direct-to-consumer aligners came from higher economic backgrounds.

SmileDirectClub has previously specified that each of its customers' treatment plans and health histories were reviewed by licensed doctors, who could also request additional information or reject some applications for the company's teledentristy care. But this kind of business model, which is not unique the company, still brings up concerns for the AAO, Guymon noted. Apart from not requiring an initial in-person evaluation, he said, supervising doctors are not always identified to patients.

“Our concern has always been that the lack of direct supervision, the lack of a patient-doctor relationship (and the fact) that the patient didn’t know who to call if they had problems, was not in the public’s best health and interests," he said.

That doesn't mean there isn't a place for telehealth in the dental world, Guymon and others said. Remote monitoring between treatments, for example, can be convenient and can alleviate some cost barriers of orthodontic care.

"We absolutely support teledentistry and many of our members use it, but just within certain safety guidelines," said Trey Lawrence, AAO’s VP, general counsel and head of the association’s advocacy team. “Patients can check in with their dentist (remotely), but also maintain knowing who your dentist is and being seen in-person before you start something more permanent, like orthodontic treatment.”

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