New York Attorney General Letitia James has secured $4.8 million in refunds for over 28,000 consumers who were wrongfully charged by SmileDirectClub after the company filed for bankruptcy and ceased operations. Among those affected were 2,265 New Yorkers who continued to be billed despite the company's closure.
SmileDirectClub, known for its dental services via telehealth, declared Chapter 11 bankruptcy in September 2023. Despite halting business operations later that year, the company persisted in charging customers for aligner treatments they could no longer receive. Many of these consumers had used SmileDirectClub's "SmilePay" program, which involved an initial payment followed by monthly installments.
Attorney General James emphasized the importance of protecting consumers from such practices: “SmileDirectClub shut its doors for good, but illegally continued to charge New Yorkers for costly dental services.” She noted that her office is committed to intervening when companies exploit consumers.
Following complaints received by the Office of the Attorney General (OAG), a cease-and-desist letter was sent to SmileDirectClub in December 2023. In response, SmileDirectClub updated its communications and redirected inquiries to HPS Investment Partners and Healthcare Finance Direct—its secured lenders' agent and payment processor respectively—who then paused collections on outstanding payments.
The settlement stipulates that affected consumers will receive automatic refunds or account credits. Additional reimbursements can be requested through an online process managed by Healthcare Finance Direct. Details on eligibility and refund procedures will be communicated via email to eligible parties.
Consumers who suspect they have been victims of misleading billing are encouraged to file complaints with the OAG either online or via phone.
The investigation was spearheaded by Assistant Attorney General Christian Reigstad under Bureau Chief Jane M. Azia’s supervision, with contributions from several other legal professionals across different bureaus within the Division for Economic Justice and Division for Social Justice.