ACCC alleges SmileDirectClub misled consumers about health insurance reimbursement for clear teeth aligners

The Australian Competition and Consumer Commission (ACCC) has instituted Federal Court proceedings against SmileDirectClub Aus Pty Ltd and its US parent company, SmileDirectClub LLC (together SmileDirectClub).

It is alleged that between May 2019 and October 2020, SmileDirectClub represented to thousands of Australian consumers that they may be eligible for a reimbursement for SmileDirectClub aligners and associated treatment from their health fund, even though most Australian private health funds did not cover the SmileDirectClub aligner treatment.

“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.

“We allege SmileDirectClub’s statements that it had contacted the health fund of individual consumers, or that consumers could get reimbursement for treatment under item numbers 825 and 811, were false and misleading because most Australian health insurers did not cover those treatments unless they had been provided by a dentist or orthodontist in a face-to-face consultation.

“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.

“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.”

In December 2019, the ASO and the ADA wrote to the ACCC and AHPRA to raise concerns around the supply of direct-to-consumer orthodontic services in Australia by online providers of direct-to-consumer aligners.

The ASO and ADA have raised concerns regarding misleading information published on a number of direct-to-consumer company websites, as well as the safety risks associated with these products and the direct-to-consumer treatment model.

The ASO strongly urges consumers to be wary of the safety risks of direct-to-consumer clear aligner orthodontic products which are provided without also offering any in-person consultation with an orthodontist or dentist prior to commencing treatment.

Moving teeth is a healthcare procedure and should involve the in-person supervision of a specialist orthodontist to ensure treatment is carried out safely and effectively. These kinds of products can lead to significant dental problems and the costs involved in repairing the damage can far outweigh the initial investment.

Click here for the ACCC’s media release.

Click here to read more about the ASO’s consumer warning regarding direct-to-consumer orthodontic products.