(WNY News Now) After SmileDirectClub kept charging for services it no longer offered, 28,000 customers, including those in New York, received refunds.
NEW YORK Today, New York Attorney General Letitia James secured $4.8 million for over 28,000 customers, including 2,265 New Yorkers, who were wrongfully billed by SmileDirectClub, a telehealth company that ceased operations after going bankrupt. Despite filing for bankruptcy in September 2023, SmileDirectClub, a telehealth company that provided dental services, kept charging customers for services even after it unexpectedly stopped operating. New Yorkers who were still being billed for services they were no longer able to get due to SmileDirectClub’s closure complained to the Office of the Attorney General (OAG). Customers who were incorrectly charged will get refunds or account credit from SmileDirectClub’s payment processor as a result of today’s agreement. Emails with information on the refund procedure will be sent to all qualified customers.
Attorney General James claimed that although SmileDirectClub permanently closed, company was still unlawfully charging New Yorkers for pricey dental procedures. Because dental treatment is costly, SmileDirectClub defrauded hardworking people of thousands of dollars by promising to deliver high-quality, reasonably priced care without charging a premium. We are returning money to those who were defrauded today and reminding businesses that my office will intervene to safeguard customers if they prey on New Yorkers.
Through its online platform, SmileDirectClub provided dental services, such as aligner treatment to help straighten teeth. The majority of SmileDirectClub’s clients used its SmilePay program to pay for their aligner treatment. This program typically required a $250 upfront payment, followed by 26 installment payments of roughly $89 per month, for a total of over $2,500.
While tens of thousands of customers were still receiving aligner treatment, SmileDirectClub filed for Chapter 11 bankruptcy in September 2023. In December 2023, the company declared that it was closing its platform, canceling all pending aligner orders, and stopping all other business operations with immediate effect. The website for SmileDirectClub continued to falsely inform customers—including those who had not finished their aligner treatment—that they were required to make all outstanding monthly installment payments, even after the company’s definitive closure.
Consumers who were told to keep making monthly payments even though they were no longer eligible for treatment complained to the OAG. Since SmileDirectClub was not offering any services, OAG addressed a cease-and-desist letter to the company in December 2023, asking it to stop urging customers to keep making payments. SmileDirectClub updated its FAQ page in response to OAG’s letter and directed OAG to Healthcare Finance Direct, SmileDirectClub’s payment processor, and HPS Investment Partners, the agent of the company’s secured lenders. HPS and Healthcare Finance Direct stopped referring SmileDirectClub’s former clients to collections in order to assist OAG’s inquiry.
The resolution reached today will result in refunds for customers who were wrongfully charged. Some of the reimbursements will be made automatically. Customers that send Healthcare Finance Direct an online refund request will receive additional reimbursements. Healthcare Finance Direct will send out emails to qualified customers with details on the automatic returns and how to obtain a further refund. Please refer to Healthcare Finance Direct’s FAQ page for additional details regarding eligibility and refunds.
If a patient feels they have been the victim of deceptive billing practices, Attorney General James encourages them to call 1-800-428-9071 or submit a complaint online.
Former Assistant Attorney General Sarah Millings of the Health Care Bureau, overseen by Bureau Chief Darsana Srinivasan and Deputy Bureau Chief Leslieann Cachola, and Assistant Attorney General Christian Reigstad of the Consumer Frauds and Protection Bureau, overseen by Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine, co-led this investigation and settlement. Noah Popp, the Consumer Frauds and Protection Bureau’s assistant attorney general, also provided assistance in this case. Chief Deputy Attorney General Chris D. Angelo is in charge of the Division for Economic Justice, which includes the Bureau of Consumer Frauds and Protection. Chief Deputy Attorney General Meghan Faux is in charge of the Division for Social Justice, which includes the Health Care Bureau. Jennifer Levy, First Deputy Attorney General, is in charge of both divisions.
