October 24, 2020

SmileDirectClub Is Trying To Silence Criticism By Tying Refunds To Non-Disparagement Agreements

The New York Times has noticed a company with the word “smile” in its name really isn’t all that friendly. Nearly 2 years ago, SmileDirectClub sent legal threats to Gizmodo after a post discussing the potential drawbacks of getting your teeth fixed over the internet was published under the title “You Could Fuck Up Your Mouth With SmileDirectClub.”

Nothing about the article was false. Not even the title. SmileDirectClub sells teeth-straightening devices over the internet. Most teeth-straightening devices are provided by orthodontists after x-rays and in-person examinations. SmileDirect is, well, more direct, claiming it can provide the right dental appliance without all the in-person stuff by having customers send in a mold of their teeth or by visiting a “Smile Shop” to have their mouth and teeth scanned.

The potential to have things go wrong — especially when your only consultation during the teeth-straightening process is online chats with SmileDirect’s dental staff — is far from nonexistent. Appliances like these can cause more problems rather than fixing the one they were purchased for.

All of this was covered in the article and everything said about SmileDirect’s business model was truthful. This didn’t stop SmileDirect’s legal reps from filing a defamation lawsuit in defamation lawsuit-friendly (pre-anti-SLAPP law) Tennessee. SmileDirect said all sorts of ridiculous things about clickbait and Peter Thiel’s takedown of Gawker, but really didn’t make any actionable libel allegations. That SmileDirect voluntarily dismissed its lawsuit less than a week after it filed it as good an endorsement as any for the stupid arguments in its complaint.

Anyway, the NYT is on the case now that more people are unhappy with their dental appliances and SmileDirect is more forceful in preventing unhappy people from complaining about its products and services. Here’s how SmileDirect conducts business with its end users.

No x-ray or dental examination is performed but customers are required to sign a consent form saying that they did have one performed before purchasing SmileDirectClub’s dental device. This removes some of the company’s liability. If the customer didn’t actually get this done, it can’t hold SmileDirect responsible for problems that might have been caught with a real exam. Since the company appears to target people who want to avoid dental exams and save money on dental appliances, plenty of customers aren’t being honest when they check that first consent box.

Then the form gets a whole lot darker.

The form also states that they cannot sue the company for any reason.

Arbitration: the best friend of every questionable company. And there’s more. The company offers a very limited warranty that’s tied to a very big gag order.

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.

If your mouth does get fucked up by a SmileDirect product, you can’t tell anyone about it. Refunds past the 30-day mark are handed out with restrictions that help the company keep its online reputation as squeaky-clean as possible.

When some… 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.

If this is a nondisparagement clause, it’s illegal. The Consumer Review Fairness Act that went into effect in 2017 outlaws exactly what’s happening here.

[T]he Act makes it illegal for a company to use a contract provision that:

1. bars or restricts the ability of a person who is a party to that contract to review a company’s products, services, or conduct;

2. imposes a penalty or fee against someone who gives a review; or

3. requires people to give up their intellectual property rights in the content of their reviews.

Hmm. Here’s a customer complaint filed with the FDA:

I requested a refund and i was told that i have to sign a release form to be refunded. The terms of that release form include that i cannot even mention the existence of the form, seek any additional compensation for damages and (this is most concerning) i could not share any information about my negative experience publicly. And if i had already posted anything in social media about my experience, i had to remove it before they would refund me.

Looks pretty illegal to me. SmileDirectClub’s critics may only be a small percentage of its customers, but they cannot legally be silenced this way. Tying refunds to gag orders is the worst form of customer service. It’s pretty much just fine print extortion. SmileDirect wants unsatisfied customers to keep their fucked-up mouths shut. And now, with some nationwide coverage, it’s going to realize turning refund payments into hush money does nothing to keep your reputation intact.
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