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SmileDirectClub shuts down months after filing for bankruptcy protection

SmileDirectClub is shutting down just months after the struggling teeth-straightening company filed for bankruptcy protection.

In a Friday announcement, the U.S.-based company that was operating in multiple countries, including Canada, said it had made an “incredibly difficult decision to wind down its global operations, effective immediately.”

That leaves existing customers in limbo. SmileDirectClub’s aligner treatment through its telehealth platform is no longer available, the Nashville, Tenn., company said while urging consumers to consult their local dentists for further treatment.

Customer care support for the company has also ceased. Customer orders that haven’t shipped yet have been cancelled and “Lifetime Smile Guarantee” no longer exists, the company said.

SmileDirectClub apologized for the inconvenience and said additional information about refund requests will arrive “once the bankruptcy process determines next steps and additional measures customers can take.”

SmileDirectClub also said that Smile Pay customers are expected to continue to make payments, leading to further confusion and frustration online. When contacted by The Associated Press on Monday for additional information, a spokesperson said the company couldn’t comment further.

Stock price tumbled amid growing debt

SmileDirectClub filed for Chapter 11 bankruptcy protection at the end of September. At the time, the company reported nearly $900 million US in debt.

On Friday, the company said it was unable to find a partner willing to bring in enough capital to keep the company afloat, despite a months-long search.

When SmileDirectClub went public back in 2019, the company was valued at about $8.9 billion US. But its stock plummeted in value over time, as the company proved to be unprofitable year after year and faced multiple legal battles. In 2022, SmileDirectClub reported a loss of $86.4 million US.

CEO of SmileDirectClub David Katzman, centre, stands with founders Jordan Katzman, right, and Alex Fenkell as the company debuts its initial public offering at the Nasdaq MarketSite in New York on Sept. 12, 2019. (Lucas Jackson/Reuters)

SmileDirectClub, which has served over two million people since its 2014 founding, once promised to revolutionize the oral care industry by selling clear dental aligners (marketed as a faster and more affordable alternative to braces) directly to consumers by mail and in major retailers.

But the company has also seen pushback from within and beyond the medical community.

Last year, District of Columbia attorney general’s office sued SmileDirectClub for “unfair and deceptive” practices — accusing the company of unlawfully using non-disclosure agreements (NDAs) to manipulate online reviews and keep customers from reporting negative experiences to regulators.

SmileDirectClub denied the allegations, but agreed to a June settlement that required the company to release over 17,000 customers from NDAs and pay $500,000 US to the District of Columbia.

U.K. group says problems included gum disease

The British Dental Association has also been critical about SmileDirectClub and such remote orthodontics — pointing to cases of advanced gum disease associated with aligners, misdiagnosis risks and more in a Sunday post on X, the platform formerly known as Twitter.

“It shouldn’t have taken a bankruptcy to protect patients from harm,” the British Dental Association wrote, while calling on U.K. regulators for increased protections. “Dentists are left to pick up the pieces when these providers offer wholly inappropriate treatment.”

WATCH | CBC’s Marketplace investigated SmileDirectClub in 2020

Testing SmileDirectClub: Hidden camera investigation

Looking to fix your smile while saving money and time? SmileDirectClub claims you can safely do it for about half the cost of a traditional orthodontist — from the comfort of your home. They advertise “No braces. No monthly visits. No paying a fortune.” Is it really that easy? We sent four testers inside with hidden cameras to find out.

A CBC Marketplace hidden-camera investigation in 2020 found that some of the company’s customers were not getting the information they need to make the best decisions, according to experts.

In the case of one tester Marketplace sent to a SmileDirectClub location, two orthodontists who reviewed the approved treatment plan agreed it might be OK for him to proceed with it, but warned there could be further problems with his gums or other issues not visible through a 3D scan.

In a statement to Marketplace, SmileDirectClub’s lawyer, J. Erik Connolly, wrote that during a pandemic, teledentistry should be embraced and that the company’s dental experts were available around the clock for customers with questions. 

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