New York AG Letitia James: AG James Recovers $4.8 Million for Consumers Wrongly Charged by SmileDirectClub
AG James recovered $4.8 million for more than 28,000 consumers, including 2,265 New Yorkers, who were improperly charged by the telehealth company SmileDirectClub after it went bankrupt and stopped providing services.
NEW YORK – New York Attorney General Letitia James today recovered $4.8 million for more than 28,000 consumers, including 2,265 New Yorkers, who were improperly charged by the telehealth company SmileDirectClub after it went bankrupt and stopped providing services. SmileDirectClub, a telehealth company that offered dental services, filed for bankruptcy in September 2023, but continued to charge consumers for services even after it abruptly halted its business operations. The Office of the Attorney General (OAG) received complaints from New Yorkers who were still being charged for services they could no longer receive because SmileDirectClub shut down. As a result of today’s agreement, SmileDirectClub’s payment processor will provide refunds or account credit to consumers who were wrongfully charged. All eligible consumers will be contacted by email with details on the refund process.
“SmileDirectClub shut its doors for good, but illegally continued to charge New Yorkers for costly dental services,” said Attorney General James. “Dental care is expensive and SmileDirectClub promised customers that they would provide affordable, quality care without the price tag, but instead, they extracted thousands of dollars from hardworking people. Today, we are putting money back into people’s pockets who were cheated and reminding companies that if they prey on New Yorkers, my office will step in to protect consumers.”
SmileDirectClub offered dental services, including aligner treatment to help straighten teeth, through its online platform. The majority of SmileDirectClub’s customers paid for their aligner treatment through its “SmilePay” program, which generally involved a $250 up-front payment, followed by 26 monthly installment payments of approximately $89 per month, for a total of more than $2,500.
In September 2023, SmileDirectClub filed for Chapter 11 bankruptcy, and in December 2023, while tens of thousands of consumers were still receiving aligner treatment, the company announced that it was shutting down its platform, canceling outstanding aligner orders, and ceasing all other business operations effective immediately. Despite SmileDirectClub’s permanent closing, the company’s website continued to misleadingly advise consumers, including those who had not completed their aligner treatment, that they must make any remaining monthly installment payments in full.