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.
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.
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.
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.