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SmileDirectClub to Release Customers From NDAs in Settlement

SmileDirectClub, which provides orthodontic services through the mail, has agreed to release customers who asked for refunds from nondisclosure agreements, as part of a settlement with the District of Columbia’s attorney general.

The settlement, announced on Thursday, allows 17,000 customers to talk publicly about their experiences with SmileDirectClub’s teeth aligners, said the attorney general, Brian L. Schwalb. The company previously asked customers who wanted refunds to agree not to discuss their experiences and delete negative social media posts about the company.

In 2020, The New York Times reported that SmileDirectClub tied confidentiality agreements to some refunds. The District of Columbia attorney general’s office sued the company in 2022, accusing it of blocking customers who were injured by its services from filing complaints with regulators or law enforcement.

“SmileDirectClub promised a simple, safe and affordable way to straighten teeth and touted five-star reviews — but behind the scenes, the company silenced dissatisfied consumers and buried complaints about injuries caused by its products,” Mr. Schwalb said in a statement.

SmileDirectClub, which also agreed to pay $500,000, said in the settlement that it had not violated the law or engaged in unfair or deceptive practices.

Susan Greenspon Rammelt, SmileDirectClub’s chief legal officer, said in a statement that claims that the company sought to stop negative consumer feedback were a “misinformation campaign.” She said that the company did not ask customers to sign a nondisclosure agreement if they asked for a refund within 30 days of receiving their aligners and that the agreements were negotiable.

The company said that its release form was modeled on one used by the orthodontics industry and that it already had plans to “tailor the nondisclosure provision more narrowly.”

SmileDirectClub’s services, which are cheaper than traditional orthodontics because they often do not involve in-person visits, have drawn criticism from dentist and orthodontist groups. The company has sued some of those critics and accused California’s dental board of conspiring to stifle competition.

SmileDirectClub went public in 2019, raising $1.29 billion at a valuation of nearly $9 billion. It has not turned a profit as a public company. Its stock has fallen below $1 a share, valuing it at $166 million.

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Mohammad SHiblu

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