To fix some crowding in her teeth, Taylor Weakley, an environmental scientist in Denver, ordered teeth aligners two years ago from SmileDirectClub, a startup she had seen advertised on social media.
At $1,850, the products were cheaper than braces, and she did not have to visit an orthodontist to get them.
But when the aligners did not correct Weakley’s teeth as promised, she asked for a refund. After a lengthy back-and-forth, SmileDirectClub said she would get her money back if she signed a nondisclosure provision as part of a general release form. In September, Weakley, 25, agreed.
“Going forward, I can’t say anything,” she wrote in an email.
What Weakley experienced was part of SmileDirectClub’s methods to limit information about customers’ dissatisfaction with its products. Seven people who ordered teeth aligners from the company described to The New York Times how the products did not fix their teeth; four said the aligners had created new problems that required traditional dentistry to correct.
When some of the customers requested refunds, SmileDirectClub asked them to sign the confidentiality provision. The agreement prohibited the customers from telling anyone about the refund and required them to delete negative social-media comments and reviews, according to a copy viewed by The New York Times. Two of the seven people The Times talked to had signed the agreement.
SmileDirectClub’s actions underline the risks of ordering products from young companies that are bringing startup-style “disruption” to health. Many such startups have sprung up in recent years selling contact lenses, birth control, acne medicine and prescription drugs directly to consumers without their needing to visit a medical professional.
But even in this world, the tactics employed by SmileDirectClub, which went public last year, stand out.
In addition to linking confidentiality to refunds, the company sued the parent of the productivity site Lifehacker last year for defamation and libel over an article that outlined the risks of its products. It also sued several state dental boards, the bodies that regulate dentistry, after they took steps that would have made it harder for SmileDirectClub to operate.
“They’ve been almost like nervous bullies to critics,” said Arthur L. Caplan, a professor of medical ethics at the New York University School of Medicine.
Susan Greenspon Rammelt, SmileDirectClub’s chief legal officer, said in interviews that the vast majority of users were happy with the company. SmileDirectClub pointed to an average customer rating of “4.9 out of 5” on more than 100,000 reviews on its website. It said fewer than 5% of its customers had received a refund. It does not publish the success rate of its aligners.
Greenspon Rammelt added that SmileDirectClub’s legal moves were necessary to protect itself. “When we believe that there is an organized campaign to damage our reputation amongst consumers, dentists and/or investors, we will defend ourselves and our mission to democratize access to care every chance we get,” she said.
SmileDirectClub has negotiated some of the general-release forms with those who have asked for refunds, she said.
SmileDirectClub, founded in Nashville, Tennessee, in 2014 by a pair of childhood friends, Alex Fenkell and Jordan Katzman, is one of the largest of the new online health companies that sell directly to consumers. Katzman’s father, David, is the company’s chief executive, and his uncle, Steven, is the chief operating officer.
Fenkell and Jordan Katzman had earlier started a website for Illinois license plate renewals. David Katzman has invested in companies such as 1-800-Contacts and Lens Express.
To obtain SmileDirectClub’s teeth aligners, people make a mold of their teeth at home with a kit provided by the company or visit one of more than 300 “Smile Shop” retail locations to have their mouth and teeth scanned. The impressions and scans are reviewed by one of the 250 dentists and orthodontists in the company’s network, who generally do not interact directly with customers.
Potential users check a consent form saying they have had their teeth examined and X-rayed by a dentist, but are not asked to verify that. The form also states that they cannot sue the company for any reason. Then the aligners, which cost $1,850, or around a third of the cost of traditional braces, are sent to customers by mail.
SmileDirectClub offers refunds within 30 days after the aligners arrive. Anything after that is considered outside the company’s official refund policy and comes with the nondisclosure provision, which it said it began using in 2016.
Traditional orthodontists, who make money from in-person consultations, said that cutting dental professionals out of the process was dangerous and that regular visits were a key to avoiding new dental problems.
“Very few of my patients go from beginning to end in the way that I envisioned or planned,” said Brent E. Larson, a professor of orthodontics at the University of Minnesota and a practicing orthodontist.
SmileDirectClub grew quickly, fueled by $440 million in funding from venture capital and private-equity investors. The company spent heavily on television and social-media ads, promising to give people “a smile they love.” It also recruited influencers and celebrity spokesmen like NBA player Draymond Green.
In September, the company raised $1.29 billion in its initial public offering, which valued it at nearly $9 billion. SmileDirectClub, which is unprofitable, lost more than $74 million in 2018, as its sales nearly tripled to $423 million from a year earlier.
By then, SmileDirectClub had more than 750,000 customers, according to company filings. Around two-thirds of them used its financing plan, SmilePay, which charges an annual interest rate of 17%.
SmileDirectClub declined to say what percentage of applicants it turns down because they are not suitable for treatment; it rejects hundreds of cases a week, it said.
Rob Porter, 54, an executive recruiter in Frisco, Texas, said that he used SmileDirectClub’s aligners last year and that they had fixed his minor overbite. “Given the cost, I was not expecting perfection,” he said.
But others have differed. SmileDirectClub has been the subject of more than 1,670 Better Business Bureau complaints since 2014. In contrast, Align Technology, which makes the Invisalign teeth aligners that people get through orthodontists and has been in business for more than two decades, has had five complaints.
SmileDirectClub said the “vast majority” of the Better Business Bureau complaints were related to shipping delays, with 3% linked to clinical concerns.
One unhappy user is Jessica Shorts, who turned to SmileDirectClub in 2017 to fix a slightly crooked tooth. Nine months into her treatment, she said, she experienced migraines and jaw pain. The aligners shifted her teeth so much, she said, that she could not properly chew and she developed an open bite, meaning her teeth no longer touched when she bit down.
SmileDirectClub declined her refund request, suggesting more treatment instead. The experience inspired her to go to dental school in Indiana, where she lives.
“If I knew then what I know now about teeth, I never ever would have done it,” said Shorts, 38, who eventually spent $6,000 on braces.
Some customers have flocked to Facebook groups to ask for advice on what happens if the aligners don’t fit or if they experience pain. They have also flooded SmileDirectClub’s Facebook page with complaints about the long wait for aligners or dissatisfaction with the results.
In September, some customers filed a class-action lawsuit against the company accusing it of false advertising and violating Food and Drug Administration regulations. All but two plaintiffs later withdrew from the suit because SmileDirectClub’s consent form required them to resolve disputes in arbitration.
As SmileDirectClub has grown, so have its regulatory fights. In recent years, Georgia’s dental board approved a new rule requiring a licensed dentist to be present when dental scans are taken. In Alabama, the state dental board interpreted existing regulations as requiring a dentist to be present.
Those rules might hurt SmileDirectClub, which was built on not needing dental professionals to be in the room for teeth scans. In 2018, the company sued the state boards in federal court. Parts of the company’s lawsuits have since been dismissed, though its claims that the boards violated federal antitrust laws are proceeding. The dental boards are appealing the parts of the cases that were not dismissed.
In October, Gavin Newsom, California’s governor, signed legislation requiring dentists to review recent X-rays before prescribing orthodontic treatment. That same month, SmileDirectClub sued California’s dental board, accusing it of trying to “squelch the competitive threat.” The board has filed a motion to dismiss the suit.
Greenspon Rammelt, SmileDirectClub’s chief legal officer, said state dental boards were trying to stifle competition. “The fact of the matter is that you’ve got over 750,000 people who’ve been able to get access to this type of care and they’re really happy,” she said.
The regulatory issues have been punishing for the company. Its stock is down around 40% since it went public.
This month, SmileDirectClub said it would sell its aligners through dentist and orthodontist offices, as well as online. Greenspon Rammelt said the move was “a natural progression of our model” in response to demand from consumers and dentists.
For Gavin Graham, 40, a technology worker in Toronto, that was too late. He used SmileDirectClub’s aligners last year, but said the treatment had created an open bite that he previously did not have.
Graham said SmileDirectClub had offered him 25% of his cost back, including agreeing to confidentiality. He declined and is fighting for a full refund.
“Had I known that I would end treatment with an open bite, I would not have signed up for it,” he said.