On Thursday, June 22, District of Columbia (D.C.) Attorney General, Brian L. Schwalb, announced that SmileDirectClub will be required to release more than 17,000 patients across the United States from onerous provisions in its nondisclosure agreements (NDAs) and change its refund policy for United States patients as part of a settlement resolving a consumer protection lawsuit brought by the Office of Attorney General (OAG) for the District of Columbia.
“SmileDirectClub promised a simple, safe, and affordable way to straighten teeth and touted five-star reviews—but behind the scenes, the company silenced dissatisfied consumers and buried complaints about injuries its products caused. Now, customers will be free to speak out,” said AG Schwalb.
“Now, because of the effective work of the OAG legal team, SmileDirectClub can no longer use NDAs to silence consumers as a prerequisite for seeking refunds, and thousands of SmileDirectClub customers across the country will be released from gag provisions in agreements they previously signed. This litigation and settlement sends a clear message to other businesses that using NDAs to silence customer feedback can be an unfair and deceptive trade practice and a violation of DC consumer protection law.”
The AAO previously reported that in December 2022, following AAO advocacy efforts, the Office of Attorney General for the District of Columbia announced that it has filed suit on behalf of the District against SmileDirectClub, Inc., bringing the consumer protection enforcement action against the mail-order orthodontics company due to its allegedly “deceptive and unfair” business practices involving non-disclosure agreements it allegedly has patients sign to receive a refund.
Filed by former Attorney General Karl Racine, the District’s Complaint claimed that SmileDirectClub (SDC) violated provisions of the District of Columbia Consumer Protection Procedures Act (CPPA). The 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.” The District’s Complaint alleges that the following conduct allegedly engaged in by SDC is prohibited by the CPPA:
- Having consumers sign NDAs to receive refunds
- Suppressing negative reviews and information about harm allegedly caused by SDC aligners
- Distorting online reviews
- Stopping consumers who claim they have been harmed by SDC from reporting problems to government regulators and law enforcement
Patient protection, including protection from potentially deceptive contract practices, has long been a focus of the advocacy efforts of the American Association of Orthodontists (AAO). The AAO has raised concerns with many Attorneys General, including former AG Racine, regarding certain business practices sometimes found in mail-order orthodontic treatment models. Notably, the AAO met with former AG Racine on multiple occasions since 2019 to discuss the AAO’s concerns over the practice of having patients sign an NDA that could prevent them from filing a dental board complaint or other complaints with government agencies that possess oversight and enforcement jurisdiction over dentistry.
“The AAO commends the District of Columbia’s Attorney General Office for recognizing potentially deceptive and unfair business practices and for taking action to ensure that such practices do not harm unsuspecting orthodontic patients,” stated Dr. Myron Guymon, AAO president. “The AAO is also proud of, and extends its sincerest gratitude toward, all those orthodontist Members who have participated in advocacy efforts seeking to protect patients, as their work on this important issue continues to yield results.”
You can read more, including the full settlement agreement, here.
New York Times coverage can be found here.
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