Cult teeth-straightening dentistry brand SmileDirectClub has been accused by the Australian Competition and Consumer Commission (ACCC) of misleading customers into thinking its services were covered by health insurance. The ACCC has initiated Federal Court proceedings over the matter.
You’ve probably seen the products of SmileDirectClub appear once or twice in the hands of an influencer promoting how excellent its services are, as they reflect light off of their perfect set of pearly whites.
However, the ACCC alleges that from the time period of May 2019 to October 2020, the company engaged in deceptive tactics to sell its product to customers. In the time period that this misinformation was available, it is believed by the ACCC that SmileDirectClub had around 26,800 customers.
According to the ACCC, SmileDirectClub informed customers through emails, texts, flyers and its website that customers would be eligible for reimbursement from their health fund, despite the fact that most health funds don’t actually cover the service SmileDirectClub provides.
They also allege that within this time period, SmileDirectClub sent out emails implying it had been in contact with customers’ health insurers, coming back with the “good news” that they would be able to have aligner treatments reimbursed.
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“We allege that consumers could not make a fully informed decision about the total cost of the aligner treatment, because SmileDirectClub’s statements left them with the understanding that part of it would be covered by their private health insurer,” ACCC Chair Rod Sims said in a statement.
“It is a breach of Australian Consumer Law for companies to make false or misleading statements about the benefits or rights associated with products and services.
“We consider that the alleged misleading representations about eligibility for a health fund reimbursement for these aligners and treatment are particularly concerning, because affected consumers did not discover that they would not receive any health insurance reimbursement until after the SmileDirectClub treatment had been paid for in full.”
SmileDirectClub’s Vice President of Australia and New Zealand, Jason Coglan, said the company was “disappointed” in the ACCC’s decision to launch proceedings.
“SmileDirectClub has established partnerships with many of the largest private health insurance companies in the United States, Canada and the EU to ensure the access to orthodontic care it enables is a covered treatment and is even more affordable to consumers.
“It continues to be our position that this should be true in Australia.”
The ACCC is currently seeking “redress” for customer losses, as well as declarations and penalties.
