Heather Wylde

Stripe Payment Processor is Auditing Coaches…and shutting some accounts down.

Stripe is Auditing Coaching Accounts & Shutting Them Down

Stripe, the payment processor, is now shutting down coaching accounts. I don’t have all the information yet. But I wanted to talk to you guys about how important it is for you to start getting your sales and marketing more compliant.

In the certification course that I just finished about FTC compliance (I’m not a lawyer or affiliated with the FTC, this was a very thorough course that was taught by a lawyer who is an expert in sales and marketing laws in the US), one of the things that he talked about was that the FTC, at another time, had gone after payment processors, and said, if you are enabling predatory businesses to rip people off, you should know that that’s what your clients are doing. Therefore, we’re going to hold you accountable for your clients ripping people off, because they couldn’t do it without the payment processors.

I’m Heather Wylde, an ethical sales strategist. I’ve been an online business owner since I’ve trained as a coach in 2009, and I’ve been online since like 2011-2013, when I started taking business courses. There are so many great people in the coaching industry, but the way that we’ve been taught to sell and market was really unethical, sleazy, misleading, and all the things. Unfortunately, because we haven’t, as an industry, come together and looked at how to solve these problems, now the government is stepping in.

I’m not sure if the FTC has started breathing down Stripe’s neck. No one has said that yet. But in light of them picking up the pace of prosecuting, investigating, and suing influencers, online business owners, and coaches, I don’t know if maybe Stripe just saw the writing on the wall and they’re like, “We need to get our ducks in a row before the FTC comes knocking on our door.” Or if the FTC already came to them and talked to them. Someone also said that Stripe is about to go public and start taking on investors from the stock market. Again, I haven’t researched this yet, I just wanted to jump on and make this post.

A lot of people aren’t taking this FTC stuff seriously. A lot of people are believing some of the myths that it doesn’t apply to them because they’re not a big-name coach, they’re not making a lot of money, they’re not based in the US, or other people are doing so many worse things. If you’re breaking these laws, and these are laws that have been on the books for a long time, they’re not new, it’s just that most of us in the online world came along and learned sales and marketing from these big-name industry-leading coaches that we assumed had good legal teams. Honestly, they probably did. But what I found out in my journey of learning about compliance and FTC is that if you have a general business lawyer, but they’re not really familiar with FTC laws, then they may have given you bad advice.

In Anik Singal’s case, he just wrote “don’t say that” with his lawyer, Greg Christiansen, and that’s actually Compliant Marketing Academy, the course that I just went through. It was taught by Greg, but Anik had lawyers, and his lawyers said it’s fine as long as nobody’s complaining. That’s another big myth.

I think the FTC kind of knows the mindset of entrepreneurs. We’re hard-headed people. If we weren’t hard-headed, we would have gone and gotten a nine-to-five. I think they know that, and I think they will continue making cases and making examples out of coaches that aren’t compliant. But I also think they know that it’s going to take a long time for people to finally be like, “Oh shit, I guess we really do have to take this seriously.” If they’re just going the legal route, I could totally see them just cutting off their ability to make money.

I know PayPal has always been a little weird with coaches. I know some coaches who have had great experiences with them and never had a problem. But I also know other coaches who have had their accounts frozen, even though no one was complaining. It just always seemed like PayPal was a little more cautious. And you were much more likely to have somebody win a dispute against you, from what I’ve heard. I haven’t had those experiences. I do have Stripe. I’ll talk more about that in a second. And then there’s also Square or Square Pay. I don’t know what’s going on with them.

We will probably have other options, but I think Stripe may just be the first to really be getting their ducks in a row. Whether that’s because the FTC has already come knocking at their door, they see the writing on the wall, or if it has nothing to do with all this stuff going on in the coaching world, but it’s just because they’re getting ready to go public, I don’t know. But these are all some factors that could be playing a part.

Also, there’s the New York Times article that just came out on June 4, called “They Spent Their Life Savings on Life Coaching,” and it is scathing. It’s talking about the MLM nature, the pyramid scheme nature. I shouldn’t say just MLM, I should say more like the predatory MLM. Maybe there’s a good MLM out there somewhere, I don’t know, I guess it’s possible. But at any rate, they called coaching a pyramid scheme. They acknowledge that not everybody is sleazy and predatory, there’s a lot of that. A lot of the bigger-name programs, you get in, and it’s like, “We’re gonna sell you this thing, and it’s gonna fix everything,” and then you get to the end of it, and it hasn’t fixed everything. And so they’re like, “We’re gonna sell you this same thing, we’re gonna pursue this new thing that’s gonna fix everything.” And you just end up paying more and more money, getting more and more certifications, or more and more healing or whatever. It’s kind of like Scientology, every time you think you’re done, there’s something else. The article paints a scary, gross, and unfortunately, kind of accurate picture of the coaching industry. Stripe may be reacting to that too.

There’s a document on the Stripe site that I’m going to put down in the description so that you can look at it yourself. It talks about prohibited and restricted businesses. It looks like they did update this just this month, it says last updated in June 2024. It’s not like they’re only going after the coaching industry. It has a bunch of what they call high-risk jurisdictions. So there are certain places that they won’t process payments from, high-risk persons (probably people with criminal records, especially if they have a history of con or fraud), prohibited services (things that it’s highly likely that maybe organized crime could be involved in), and prohibited goods (adult content and services, debt relief companies, gambling, government services with misleading claims, identity protection services, legal services like bankruptcy attorneys, travel, commercial airlines and cruises, unfair, deceptive or abusive acts or practices, acts or practices that contravene rules, laws, regulations, or guidance prescribed by the Federal Trade Commission, Consumer Financial Protection Bureau or other local consumer-related or regulatory bodies).

The first thing is pyramid schemes, multilevel marketing services, get-rich-quick schemes, businesses that make outrageous claims, use deceptive testimonials, use high-pressure selling, or use fake testimonials. That’s half of the coaching industry, especially like the business coaching side of the industry. This is why it’s not an attack on coaching. It’s an attack on unethical businesses. It’s an attack on predatory business practices. Now, unfortunately, so I heard about this from someone who I’m going to be doing a podcast interview with, she’s going to be interviewing me on her podcast. She was telling me about this was something that had become a thing in her circles. And she said that she had gotten audited, but I wasn’t able to get all the details. But what it sounded like is they audited her, and I don’t know if it was for the entire time she had her account, or if it was like, “Send us all the information for the last two years or something,” I don’t know, I’ll find out. But she said that all she had to do was send in her contracts, showing that all the charges were legal, and the signatures from the clients and everything, she had all her ducks in a row, which is a big thing.

Even if you’re being compliant in the way that you’re selling and marketing, one of the ways you have to be compliant is having your documents organized. Because there’s no way to prevent the FTC from ever looking at you. But you can do things that will lower your risk and have your ducks in a row so that if they ever did come knocking, you can just hand them over, here’s the substantiated proof of all my claims. And then, hopefully, they can just put off unnecessarily, hopefully, you’ve got everything, and they agree with you, and they just back off. But at any rate, so she was audited. And I think that she said that they started it in mid-May. And they gave her two weeks to get all the information to them. And she’s fine, she got to keep her account.

But she messaged me this morning or this afternoon and said that somebody she knows who is a seven-figure coach, I don’t know who it is, somebody’s really well known. And she got the notification after sending in all her information that they are shutting down her account. And they didn’t, the reasons for shutting it down were like really, really vague. So I don’t know, this person, I don’t know if they are predatory or in their marketing and sales. My feeling about it is that it’s probably not that they’re a predatory coach and that they do gross things, but just that their marketing and their selling is not compliant. And so they just decided that it wasn’t worth the risk.

And I don’t know, again, this is me piecing together things that I know from these major events happening. First, the FTC, and this has been happening for a while, we’ve just had our heads in the sand about it. And then this New York Times article, and now the thing with Stripe. I wouldn’t be surprised to see the same kind of thing start happening with PayPal and Square.

It’s gonna be very interesting times in the coaching industry. Now it’s not Armageddon. If you are a solid coach, if you’re somebody that like this really is your life purpose, to be a coach, you’re just gonna have to adapt, you’re gonna have to learn about compliance, you’re going to have to change the way that you’re doing things. And even if you’re ethical, doesn’t mean you’re compliant. I’m very ethical in the way that I take care of people. I’ve never had anybody try to chargeback on me. I’ve had clients that weren’t happy. And so I just refunded them their money. I don’t think they went to like the Better Business Bureau or anything on me, but they could have. That’s one of the things, just because you think nobody is complaining doesn’t mean that they’re not complaining, maybe they’re not complaining to you.

Just because you’re ethical, just because you’re running your business well does not mean that you’re compliant. So there are a lot of things that I am changing in the back end. I just had a website done, and I have to go in and change so much. As a matter of fact, I’ve shut my website down, except for the blog section so that I can put out these types of posts and educate people about it.

The ways that I was selling was not compliant. It wasn’t unethical, I wasn’t being pushy, I wasn’t lying to anybody. I wasn’t misleading anybody. But I also wasn’t aware of laws about the ways that I had to start my sales calls, for instance, or that I had to keep my sales calls for a certain period of time, in order to be legally compliant. There are all kinds of stuff.

I will be making more content around this, I am not making this to scare you, I’m making it to educate you so that you can get ahead of the curve. If you think that your sales pages or anything might not be compliant, I would go ahead and just, and it is not legal advice, I cannot give you legal advice, because I am not a lawyer. But what I will say is what I’m doing, I’ve taken down all my sales pages, I took down most of my website, because my testimonials aren’t compliant, there are four things that you need for your testimonials to be compliant. It’s not enough that they’re true. It’s not enough that they’re really from your client. There are four other things that you have to have.

So I would say, take yourself down, because it would be better to miss out on some sales than it is to invite the wrath of the FTC, or the wrath of Stripe. If you guys are getting audited, don’t freak out, give them your contracts, send them over, go talk to a good business lawyer. I’m guessing, and again, this is not legal advice, this is just me guessing that you would need some kind of business lawyer that specializes in these sorts of business-to-business disputes or something. And maybe you could get your account reopened, I have no idea.

I know the story I heard about the big earner coach, they said, “We promise you we’ve been very thorough, we’re not going to be able to reverse this decision now.” Can they legally say that? I have no idea. So I’m sure that person is talking to a lawyer right now.

But stay tuned to my blog, let me know what you want to know, go dive in. I’ve got a whole series of posts on FTC compliance for online entrepreneurs or online businesses, and then another series that is about ethical coaching, and some of the posts are on both because they kind of go together. And if you want to learn ethical selling, this is going to become more and more important.

Because compliance, a lot of that is really moving things toward ethical, but it doesn’t cover everything. And you can be compliant and still get customer complaints. And the FTC can investigate you, even if no one ever complains. But if you get customer complaints, they’re much more likely to come knocking on your door one day. And so it’s going to become that much more important. Especially if you’re a solo entrepreneur, if you’re a solo coach, this was important to you anyway. But if you weren’t necessarily, but you really want to keep your business, the focus is going to really move to only selling to people that are likely to get good results. And creating packages that provide high-level, high-touch support, so that people feel taken care of, they feel like the money they spent with you was worth it. So they are much more likely to get results. Because otherwise, they’re going to complain and getting chargebacks, maybe nobody complains, but they actually put a chargeback on your business. So if you’ve had people chargeback on your Stripe account, then that could be something that could also trigger you being investigated or being audited by Stripe.

I don’t want this to get too long, but let me know what else you want to know. Again, I’m Heather Wylde. I’m an ethical sales strategist. And I’m a consumer advocate. I’ve written two books about consumer advocacy for coaching clients. The first one was written in March 2022. I’ve been an ethical business coach since 2020. I am not jumping on the trend. This is just what I’ve been about all along. My second book was published in December of 2023. And it’s called “What Every Entrepreneur Wishes They Known Before Hiring a Business Coach.” And it’s the seven steps that I learned to put coaches through before hiring them. So it’s about how to do research, how to interview them, not just let them interview you on a sales call, but to interview them to do everything that you can to make sure it’s a good fit and then how to ensure that you get good results with them. That will also be in the comments in the description.

All right, thanks guys. And hold on to your hats, it’s gonna be a wild ride, it’s gonna be a little bumpy. But the coaching industry, I don’t think it’s going anywhere. But there are a lot of changes. And the last thing you need to do is put your head in the sand, the best thing you can do is to start educating yourself. Take some anxiety medication if you need to. I just got back on anxiety medication, myself. But don’t freak out. And don’t listen to people that are talking about this like it’s Armageddon and trying to scare you into buying their stuff. That’s just gross, they’re not helpful.

But do go to the ftc.gov site. Check out Anik Singal’s book and his course. I am not affiliated with him at this time, I may become an affiliate. The book is really good. The course is really solid from everything I’ve seen of it so far. The first part was about FTC compliance that was taught by his lawyer, it was kind of giving you the background and helping to understand the laws and the regulations. The second part is Anik actually telling you how to market and sell successfully, even with all these restrictions. And that part hasn’t started yet, so I can’t report on it. But the course and the book are really good, solid information. It’s not legalese. So it’s a lot easier for those of us who did not go to law school to understand and if I do change to being an affiliate, I will disclose that. I will disclose that in the description above any affiliate links.

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