Washington, DC, attorney general sues SmileDirectClub over customer NDA requirements

Washington, D.C., Attorney General Karl Racine filed a lawsuit against teledentistry company SmileDirectClub for allegedly misleading customers and suppressing negative information about its products with restrictive nondisclosure agreements. 

Mr. Racine alleged that SmileDirectClub requires customers to sign an NDA in order to get a refund after 30 days of use, according to a Dec. 5 news release. These NDAs allegedly violate District law by prohibiting customers who seek refunds after 30 days from writing online reviews, which makes it difficult for potential customers to make informed decisions. The NDAs also allegedly prohibit customers from filing complaints with government regulators or law enforcement if they suffered injuries.

The lawsuit seeks restitution and damages for harmed consumers, civil penalties for violating District laws and costs the District incurred for the case.

A spokesperson for SmileDirectClub sent a statement to Becker's in response to the lawsuit, stating that the company's nondisclosure provision in its general form of release follows guidelines set by the American Association of Orthodontics.

The American Association of Orthodontics Insurance Company recommends that patients seeking refunds for treatment sign releases agreeing that the transaction is confidential, not an admission of liability, and that the patient will not take any civil action or publicize a complaint in the media.

"SmileDirectClub is disappointed the outgoing D.C. Attorney General has chosen to take this action based [on] outdated misinformation and competitors' lies about the Company's service and products that have been proven untrue and inaccurate time and again. In so doing, the D.C. Attorney General ignores the substantial savings and expanded access to care SmileDirectClub has made available to D.C. residents," the statement said. "The complaint also takes issue with SmileDirectClub's legal efforts against state boards and others that have tried, in their own self-interest, to stifle our innovative way of lowering customer costs and expanding access to care. The Attorney General conveniently overlooks the FTC's actions against the Alabama dental board for its attempts to squeeze out SmileDirectClub — as well as the amicus briefs filed by the antitrust agencies in each of the Alabama, Georgia and California dental board lawsuits — and should realize that the Company's challenges to entrenched incumbents in dentistry are pro-consumer. We look forward to the opportunity to educate the AG's office and the court about our model and the more than 1.8 million customers who have safely and effectively straightened their teeth with SmileDirectClub."

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